Hard times: UC hardship payments explained
Since the reintroduction of conditionality to universal credit (UC), following a pause due to the COVID-19 pandemic, the number of UC sanctions imposed has been steadily rising.
Hardship payments are payable when a claimant’s UC has been reduced due to a sanction or benefit offence and s/he is in hardship. Sabrina Dubash looks at the main rules and issues.
Who can apply?
A hardship payment can only be made to a claimant who:1Reg 116 Universal Credit Regulations 2013, No.376 (‘UC Regs’)
1is 18 years old and above, and whose UC has been reduced due to a sanction (high, medium or low level);
2has met any compliance conditions for a low-level sanction;
3‘completes and submits’ an application for a hardship payment approved by the Secretary of State for Work and Pensions;
4submits further information and evidence to support her/his application for a hardship payment;
5accepts that the hardship payment is recoverable;
6had complied with all work-related requirements within seven days of the application for the hardship payment; and
7is in ‘hardship’.
Note: if UC has been reduced because of a benefit fraud offence, then a hardship payment can be made, provided all the conditions of entitlement to UC are met, including all of the above points except for 1, 2 and 6. If UC has been reduced due to a benefit offence, then claimants can apply for a hardship payment if they are 16/17 years old, unlike the rules above for reductions due to sanctions.
What is hardship?
Hardship is described as being unable (or will be unable) to meet the ‘immediate, most basic and essential needs’ for either her/himself or a child (or qualifying young person) for whom s/he is responsible because and only due to her/his UC award being reduced because of a sanction or a fraud penalty.2Reg 116(2) UC Regs ‘Immediate and basic and essential needs’ are accommodation, heating, food and hygiene.3Reg 116(3) UC Regs
Regulation 116 (2) of the Universal Credit Regulations 2013 (‘UC Regs’)provides that the claimant needs to have made every effort to access alternative sources of support and ensure that every effort is made to stop any expenditure that does not relate to her/his immediate most basic and essential needs. Claimants should provide as much evidence as possible in order to demonstrate their means, such as evidence of income/expenditure and bank statements.
How to apply?
The first step is to contact UC (either through the journal, over the phone or in person at the job centre) to request a hardship payment. Following this, the claimant may be asked to complete an application form and/or provide additional supporting evidence and information.
Applications for hardship payments need to be made in every assessment period where the UC is reduced due to a sanction or benefit offence (see ‘when can payments be made’ below). For this reason, claimants cannot apply for a hardship payment in the assessment period that the sanction is applied, as the UC payment has not yet been reduced.

When can payments be made? Hardship payments are made at a daily rate for a period called the ‘hardship period’. The hardship period begins on the date a claimant meets all the conditions to apply for a hardship payment and ends the day before the next usual UC payment date.4Reg 117 UC Regs
If the hardship period is calculated as seven days or less, then the hardship periods ends on the day before the payment date of the following assessment period or, if earlier, when the sanction ends.5Reg 117(2) UC Regs
It is because of the hardship period that a new application for hardship payments must be made in each assessment period where the claimant needs the hardship payment. Therefore, in order for claimants to receive the longest hardship period and so receive the maximum hardship payment they could be entitled to, they should apply for a hardship payment on their UC payment date6para L1146, Ch L1 Advice for Decision Making (ADM) for each assessment period in which they need it.
How much?
The amount of the daily hardship payment is 60 per cent of the daily UC sanction reduction amount. This is calculated by taking the amount of reduction made from the UC standard allowance, multiplying that number by 12 and dividing by 365. Sixty per cent of that figure is the daily hardship payment rate, which should then be multiplied by the number days in the hardship period.
Challenging a refusal of hardship payment
Where a claimant has been refused a hardship payment, that can be challenged through mandatory reconsideration and (if needed) by appealing to the First-tier Tribunal. In the interim period, claimants could request that a hardship payment be paid as their situation will be more severe while waiting for the outcome.
Recovery of hardship payments
In practice, hardship payments must usually be repaid (but see ‘Hardship payments may be recoverable’ below). The rules concerning deductions for recovery and rates are the same for UC overpayments. It is currently a maximum of 25 per cent of a claimant’s standard allowance that can be deducted.7para 4(1) Sch 6 Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Claims and Payments) Regulations 2013, No.380 If the recovery rate causes a claimant(s) hardship, s/he should request the DWP to exercise discretion to lower the rate. Refusals may be challengeable on judicial review: for a pre-action letter template, see cpag.org.uk/welfare-rights/judicial-review/judicial-review-pre-action-letters/deductions-uc. Please contact CPAG’s Judicial Review Project for any assistance needed on this template at JRproject@cpag.org.uk.
Hardship payments may be recoverable
To be eligible for a hardship payment, acceptance of recovery from future UC payments is required. The hard truth is that many eligible claimants in need of a hardship payment decide not to apply, due to the fact they are, in effect, loans which will reduce their UC for a period often beyond the end of the sanction itself.
Therefore, it is vital to remember that hardship payments are not, by default, to be recovered in each and every case.
Firstly, regulation 119 of the UC Regs provides that hardship payments are not recoverable during any assessment period where the claimant meets (or joint claimants have combined earnings that meet) the relevant earnings threshold for their age group, or if they met the threshold for a period of six months at least since the sanction ceased.
Secondly, in a recent successful judicial review claim brought by the Public Law Project, the Secretary of State conceded that the DWP has a discretion whether to recover hardship payments in all cases.8 Section 71ZH(1)(a) of the Social Security Administration Act 1992 states that the ‘Secretary of State may recover any amount paid by way of a payment under section 28 of the Welfare Reform Act 2012 (universal credit hardship payments) which is recoverable under that section’ [emphasis added].
Following the successful judicial review claim, the DWP’s Benefit Overpayment Recovery Guide8publiclawproject.org.uk/latest/dwp-changes-guidance-on-recovering-hardship-payment-debt has been amended to acknowledge and highlight that the DWP has discretion, ‘in exceptional circumstances’, not to recover hardship payments, ‘including where recovery is detrimental to the health or welfare’ of the claimant or a member of her/his family.
Therefore, where the recovery of the hardship payment will cause further hardship to claimant, then requests to the DWP to use discretion not to recover the hardship payments should be made, referencing the above legislation and the amended Benefit Overpayment Recovery Guide9DWP, Benefit Overpayment Recovery Guide, paras 5.83 and 8.1, available at gov.ukClaimants can do this via the UC journal or UC helpline. Explain what effects the recovery would pose – eg, to the welfare or health of claimant(s) and what impact it would have financially. Evidence should also be provided to show how recovery will impact the claimant(s) and any dependants.
If the DWP refuses to exercise discretion or refuse to waive recovery of a hardship payment after sufficient evidence has been provided, then this could be challenged via judicial review. Please contact the Public Law Project, who may be able to assist, by email to enquiries@publiclawproject.org.uk.
1     Reg 116 Universal Credit Regulations 2013, No.376 (‘UC Regs’) »
2     Reg 116(2) UC Regs  »
3     Reg 116(3) UC Regs »
4     Reg 117 UC Regs
5     Reg 117(2) UC Regs »
6     para L1146, Ch L1 Advice for Decision Making (ADM) »
7     para 4(1) Sch 6 Universal Credit, Personal Independence Payment, Jobseeker’s Allowance and Employment and Support Allowance (Claims and Payments) Regulations 2013, No.380  »
9     DWP, Benefit Overpayment Recovery Guide, paras 5.83 and 8.1, available at gov.uk »