May 192016

Thanks to David Morgan, who wrote this article to explain the financial implications of being sanctioned under Universal Credit, and how hardship payments which are supposed to help claimants to avoid total destitution, because they are now recoverable, extend the duration of a sanction.

To follow David on Twitter @AjobTracker

On Google:


If you are low paid or unemployed, you are probably aware that Universal Credit will replace both Jobseekers Allowance (JSA) and tax credits. Part of your deal to get that benefit payment will be a claimant commitment — a signed promise. That claimant commitment will be to actively job seek — for example for 35 hours each week if you are unemployed or to work and job seek for 35 hours in total. It may also be part of your claimant commitment to get a payrise, work more hours or get a second job. The purpose of the claimant commitment is to decrease your reliance on the government for income and become self-reliant.

The Jobcentre will appoint a work coach to you. That person will track your efforts — either checking what you search for on the DWP web site — Universal Jobmatch or invite you in for meetings to discuss your job seeking efforts. The frequency will depend on whether you are unemployed or employed. It could be 2 weekly, monthly or 3 monthly.

At some point they may decide you have failed in your commitment — for example you didn’t get a second job or a payrise that you said you would or didn’t search for enough jobs. At this point they may decide to sanction your benefit. This will mean losing all of your benefit for a period of time — typically 4 weeks. A benefit that may be paying your rent or enable you to pay for your busfare to work or the jobcentre — or to buy food.

The DWP or CAB may tell you to apply for a hardship payment. The rules to get this payment will mean that you have to be refused help by your relatives first and that you need it for essential things like food or electricity, not for example to pay for your Sky TV box. It will not be easy to get a hardship payment. Before they even process your hardship claim, they will check that you are still following your claimant commitment. So that may require another meeting at the Jobcentre one or two weeks later.

Assuming the Universal Credit basic allowance is £251.77 per month for a single person and assuming the DWP have agreed to pay you a hardship payment that will only be 60% of your normal Universal Credit payment. The single worker might get £151 as a hardship payment and would be £100 short that month. A female lone parent with a severely disabled child might get as much as £2167 normally under Universal Credit — which includes rent and other allowances. If she is sanctioned but gets hardship, she could lose over £876 — that could be equivalent to a month’s rent. And as those payments are loans, they will have to be paid back from future Universal Credit payments. So they will both continue to be short of money on Universal Credit for months.

The month after a sanction, the DWP would automatically deduct 40% from a Universal Credit payment to repay a hardship loan. For the lone parent who was normally getting £2167 to help with a severely disabled child she will have another £867 deducted from her income — again potentially another month’s rent. The single worker would have another £100 deducted to repay the loan. Again perhaps no busfare for work and no money for lunch.

The following month both will still owe 20% of their DWP hardship loans. So another £50 deducted for the single worker and another £433 from the lone parent with the disabled child.

A one month punishment will have been extended to three months for both these people already deemed to be on low incomes and needing the safety net of the DWP.

But it will not end there. Each month the DWP will check their status: “are you job seeking, did you get a payrise or did you get another job”. So they could both have another sanction and then another. It will never end as long as they continue to claim Universal Credit.

In a recent survey by York University, they found cases of people having 5 benefit sanctions one after another. Increasing in length from 4 weeks to 3 years. If you are unlucky enough to have repeated benefit sanctions, this will seriously affect your physical wellbeing and mental health — and that of your children if you have any.

The aim of the government is to make you self-reliant — but Universal Credit sanctions may mean you have to rely on relatives or friends and the goodwill of service providers to not end up in court, homeless or worse.

For more information about benefits and sanctions:




[suffusion-the-author display='description']
 Posted by at 20:38

  3 Responses to “The hardship of a hardship loan”

  1. oh dear oh dear norman law cometh sanctions yep all part of their aktion t4 plans they came for the disabled sick mentaly ill and unemployed but now they come for those working nothing safe from this lot who will steal your crumbs jeff3

  2. Absolutely disgusting ! This victimisation of the unemployed & low paid is surely against our human rights. What is Europe doing about this ? Whats next ? Building workhouses?

  3. Clearly this will impact even more on the disabled. Those with learning difficulties, Mental health problems as well as other severely disabled awaiting appeals onesa will be subject to this evil legislation. The government has not thought about the repercussions of this sadistic attempt at so called “ending the culture os dependancy on benefit”. I can’t imagine how life will be for those on Universal Credit. Lives will be lost because of this legislation and the Government is aware of this. There are not many people unwilling to work. Yet society is being fed lies to create an illusion of masses of people refusing to work for a better life on benefit. It is simply untrue. I have experienced it first hand. Starving people, making them homeless because of ill thought out legislation should be a crime against humanity. These are human beings not machines or people who don’t matter. The cost of this will be much more than is antisipated in increased suicides, hospital treatment and crime. For some reason these things don’t matter to this corrupt and evil ‘government.

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