The Department for Work and Pensions (DWP) has warned that thousands of Universal Credit claimants may not be allowed to receive the government's cost of living money for breaking rules. As a result, some claimants may see their benefits cut to zero - meaning they won't be entitled to the cash.
The DWP says this is known as a 'nil award' of Universal Credit. Reasons for this include breaking rules listed in the 'claimant commitment' they would have agreed to when signing up for the benefit.
Other reasons involve high earnings or getting a sudden rise in savings that are over the £16k limit - for example, from inheritance or money from a redundancy. If a claimant starts receiving another type of benefit, which pushes their overall income up, then this may also be another reason of losing out, reports BirminghamLive
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The matter of such sanctions was raised to MPs as a parliamentary question by Labour's Vicky Foxcroft (Lewisham, Deptford). She asked if the DWP could "make an estimate of the number of claimants who will not receive the first cost of living payment in 2023 following application of sanctions to their Universal Credit."
Mims Davies, Parliamentary Under Secretary of State at the Department for Work and Pensions, issued a written reply back, which reads: "People who have a Universal Credit claim but their award is nulled (received a nil award) during the qualifying period will not be entitled to a Cost of Living Payment.
"During the qualifying period for the first 2022/23 Cost of Living Payment of £326, an estimated 7,000 households received a nil award due to sanctions. People are only sanctioned if they fail, without good reason, to meet the conditions they agreed to. 97.6 per cent of sanctions in the quarter to October 2022 were applied for failing to attend a mandatory appointment at a Jobcentre.
"These sanctions can often be resolved quickly by claimants getting in touch and attending their next appointment. If someone with no Universal Credit award due to a sanction re-engages with us they may get one of the later Cost of Living Payments. We will be delivering the means-tested cost of living payments in three separate payments in 2023/24, reducing the chances of someone missing out altogether."
If a sanction is put in place, anywhere between 20 per cent and 100 per cent of a claimant's standard Universal Credit allowance can be cut. An individual claimant might face a cut of up to 100 per cent, but couples could see 50 per cent.
What are Universal Credit sanctions?
According to welfare charity Turn2Us, when you claim Universal Credit, "you will be set certain things you have to do in order to get your Universal Credit payments. This is called your Claimant Commitment or your Work Related Requirements. What these are will depend on your circumstances.
"If you don’t do something you were supposed to do, and you don’t have a good reason for not doing it, then you will be sanctioned. This means that some of the money from your Universal Credit will be taken away for a set period."
How much will a Universal Credit sanction be?
If you are single and over 25, the sanction will be £11.00 per day for as long as your sanction lasts. If you are single and under 25, the sanction will be £8.70 per day for as long as the sanction lasts.
If you are in a couple and one or both of you is over 25, the sanction will be £8.60 per day if only one of you has been sanctioned. If you are in a couple and are both under 25, the sanction will be £6.80 per day if only one of you has been sanctioned.
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