DWP: 800,000 Universal Credit claimants may not get cost of living payment

The Department for Work and Pensions (DWP) will not give cost of living payments to potentially 800,000 people on Universal Credit. This includes over 150,000 children. Following an investigation prompted by a reader’s comment, The Canary can reveal that these figures are despite what the department claims about entitlement.

DWP: 1.5 million people without support

As The Canary reported on 14 July, the DWP is denying 1.5 million people the £650 cost of living payment. We crunched the numbers of people who won’t get it. Overall, the number of people the DWP is abandoning includes:

• 433,000 Housing Benefit claimants
• 523,000 Carer’s Allowance claimants
• 568,000 PIP/DLA claimants

It isn’t possible to work out the number of ESA/JSA claimants not entitled to the payment because the figures aren’t publicly available. So, overall, around 1.5 million social security claimants will not be entitled to cost of living payments.

The article from 14 July prompted a comment from a Canary reader. They said:

Why is nobody talking about the fact people on UC [Universal Credit] who didn’t receive a payment during the qualifying period don’t get the money either?

So, The Canary decided to look into this.

Universal Credit “nil awards”

When the DWP doesn’t give a Universal Credit claimant a payment but still keeps their claim open, it’s called a “nil award“. As it wrote:

A household is counted in Universal Credit statistics… with claims that… have a nil award (due to earnings or deductions)

So, even if the DWP doesn’t pay you anything, you’re still classed as a claimant. But with the cost of living payment, there’s a catch.

As the DWP wrote:

You will not be eligible for the Cost of Living Payment if your earnings reduced your Universal Credit to £0 for the qualifying assessment period. This is sometimes called a ‘nil award’. If money has also been taken off for other reasons (such as payments of rent to your landlord or for money that you owe), you might still be eligible.

So, how many people are going to be affected by nil awards?

800,000 people the DWP may abandon

The Canary crunched the numbers using DWP figures.

We found that in the most recent data (February 2022), there were 824,000 people who had a Universal Credit claim but the DWP gave them a nil award. It’s unlikely that the number of nil award households has dropped a lot since February 2022.

It is not clear how many of these people had nil awards because of deductions. Therefore, they might still be eligible for a cost of living payment. But given the average Universal Credit payment is £790 per household and the average deduction £61, it is unlikely that the number of nil awards due to deductions is that high.

Moreover, the DWP hasn’t shared the criteria according to which people with nil awards due to deductions would still get the cost of living payment. Given that an algorithm is working out who is entitled to Universal Credit, it may mean the DWP makes mistakes with this process.

Also, as The Canary reader wrote:

the qualifying period fell… during a known time for tax rebates to hit wages

For self-employed people who filed their tax return before the 31 January deadline, then HMRC would have given them any tax rebates they were owed during the DWP cost of living payment qualifying period. This means that if they claimed Universal Credit, the tax return would be deducted from their award.

Hollow claims of DWP support

So, potentially the DWP will deny hundreds of thousands of Universal Credit claimants the cost of living payment. As The Canary previously wrote regarding 1.5 million people not being entitled to support:

For the DWP to give cost of living payments only to some people while ignoring… others is highly regressive. Many of the people it is ignoring may well be no financially better off than those who are entitled to the payments.

Now, with potentially another 800,000 people added to this – the DWP’s claims of support with the cost of living crisis ring utterly hollow.

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