Universal Credit claimants who have paid back hardship loans in the last seven years might be able to get some of their money back from this week.
A hardship payment is emergency money given to claimants by the Department of Work and Pensions (DWP) to help them meet their essential costs when their benefit has been cut because of a sanction or penalty for fraud. And now the DWP has announced that it is reviewing the loans from January 2014 to January 2021 , in the light of concerns that people were made to pay them back when they couldn't afford to do so.
The news comes as MPs heard that sanctions are “back with a vengeance” this year, as the number hit by penalties was 250% higher than in the three months before the pandemic, with 2.5% of claimants being sanctioned each month compared to 1.4% prior to 2020. The number of Universal Credit claimants who were serving a sanction in August was 115,274, after a peak of 117,999 in July. That is more than three times the pre-pandemic peak of 36,771 in October 2019, the benefits sanctions debate heard last week.
Read more: Warning that Universal Credit claimants face real-terms cut to benefit
In June 2022, £34 million was taken from claimants by way of sanctions, in July £34.9 million and in August, over £36 million. Claimants who have been sanctioned after January 11 2021 will not be able to claim to get their money back.
The hardship payment, which is normally around 60% of the previous month's sanction, is to cover household bills like food and energy. It normally needs to be paid back, but claimants can ask for the repayments to be halted if they can't afford to pay them back.
However, if you had previously asked for the repayments to stop, but you were refused, you can now ask the DWP to review your case, which means you could potentially get the money back you have paid to repay the loan from the DWP.
The decision on whether you will get a refund is down to the DWP, but you can ask it to review its decision if you asked the DWP to waive the repayment of a hardship payment between January 1, 2014 and January 11, 2021 and your request was refused. To claim you money back, the hardship payment must have been repaid.
You will also need to show with evidence that you could not afford to repay the hardship payment at that time and that making the payments had significant effect on your or your family’s health or wellbeing. Evidence could include such things as bank and credit card statements, information about any other loans you were paying back or letters from creditors about money owed. If you don't have any evidence, the DWP will also consider a letter from a doctor or other medical professional saying that repaying the money caused a health condition or made it worse. You will also need to provide information about your income and living costs at the time to support your application.
The form to apply is here or the DWP is also accepting letters, as long as it answers all the questions on the form. The postal address is: Debt Management (C), Mail Handling Site A, Wolverhampton, WV98 2DF. You have until June 19, 2023, to make an application.
Once you've applied, the DWP will contact you within six weeks of receiving your application to let you know it has been received and will send a decision within 13 weeks of receiving it - but remember, the DWP has to decide on each case individually, and there are no guarantees you will get anything back at all.
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