If you find yourself struggling financially due to a sanction or reduction in your Universal Credit payments, the Department for Work and Pensions (DWP) may offer an emergency hardship payment to help cover essential costs like food and bills.
While this payment can be a lifeline for many claimants, it’s important to remember that it’s essentially a loan, meaning it must be repaid once your sanction ends. Here’s a closer look at who qualifies for the payment, how to apply, and how repayment works, including some key facts and figures you should know.
Who Is Eligible for a Hardship Payment?
To be eligible for a hardship payment, you must meet a few important criteria. For starters, you need to show that you’ve exhausted other financial options and are unable to cover your basic needs or those of any dependents. This means you must not have resorted to non-essential spending like buying entertainment or applying for a credit card or personal loan.
You must also be engaged in the mandatory work-related activities required by the DWP within the past seven days. These activities may include job searches, interviews, or any other tasks set by your work coach.
A person who receives the maximum Universal Credit monthly standard allowance of £628.10 and lives with a partner over 25 years old, for instance, could receive a hardship payment of up to £378, based on around 60% of the sanction imposed on them, according to Citizens Advice. This payment provides essential support during periods when benefits are reduced or paused due to a sanction.
Manchester Evening News reports that the DWP’s hardship payments are intended to cover basic living costs, and the amount granted is linked to the level of your benefit sanction, making it crucial to understand your entitlements.
How to Apply for a Hardship Payment
If you need to apply for a hardship payment, the process is relatively simple, though you’ll need to provide documentation to prove your eligibility. Start by logging into your Universal Credit account and updating your journal with relevant details of your situation. Alternatively, you can contact your local Jobcentre or call the Universal Credit helpline at 0800 328 5644.
In addition to confirming your eligibility based on the criteria mentioned above, you will need to submit supporting evidence. This typically includes a financial statement showing your monthly income and living expenses, which helps demonstrate the severity of your financial need.
Keep in mind that your application will only be approved if you have made every effort to reduce your spending on non-essentials and can show that you’ve been actively participating in the work-related activities required by the DWP.
Repayment of the Hardship Payment
While the hardship payment can be a valuable resource during a tough time, it’s important to remember that it’s a loan and must be repaid once the sanction period ends. The repayment is generally deducted automatically from your future Universal Credit payments, with the deduction amount being up to 25% of your standard allowance each month.
This means if you receive £628.10 a month in Universal Credit, your repayment could be as much as £157 per month until the hardship payment is fully reimbursed.
If you’re concerned about repaying your hardship payment, you don’t have to face it alone. Citizens Advice offers free guidance and support to help you manage the repayment process. They can assist you in understanding your repayment terms and may even help you arrange a more manageable payment schedule if necessary.
Additional Facts and Figures to Keep in Mind
To ensure you are fully informed, here are some additional details to remember when applying for and repaying your hardship payment:
- Age Requirements: Generally, you must be over the age of 18 to qualify for a hardship payment. However, if the sanction is due to fraud, you can still qualify at the age of 16.
- Maximum Hardship Payment: If your Universal Credit sanction is significant, you could receive a hardship payment of up to £378 if you meet the eligibility criteria.
- Repayment Deduction: Repayments will be automatically deducted from your Universal Credit at a rate of 25% of your monthly allowance.
