DWP handing compensation to people on Universal Credit forced to repay money

The Department for Work and Pensions is extending a scheme which provides compensation payments to people who were wrongly forced to repay Hardship Loans. To be eligible for a hardship payment, you must have been sanctioned and had your Universal Credit payment reduced at 100% of your standard allowance (50% or more if you’re in a couple).

You must also be aged 18 or over if your payment is reduced because of a sanction, or aged 16 or over if your payment is reduced because of a fraud penalty and be struggling to meet your immediate basic essential needs, or those of a child or young person you’re responsible for.

You must also have looked into all possible alternative sources of support and have taken all reasonable action to reduce non-essential costs. But research shows the benefits department outright refused requests from individuals to waive or review the rate of repayments.

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In 2021, it was ruled that this was wrong, and a scheme was set up to compensate those who had been affected. This week, the DWP extended this compensation scheme after it emerged that just one application had been successful since it was implemented.

Emma Vincent Miller, a public law specialist at Osbornes Law, said: "More than half of these sanctions were subsequently overturned, yet when she applied to the Hardship Payment Refund Scheme, her application was ignored until the eleventh hour when she was forced to involved solicitors. Despite having been repaid what she was owed, my client was determined to make sure that others were not ignored and so decided to bring a judicial review, which led to the DWP agreeing to re-run the scheme.”

Claimants have been told they can ask DWP to review its decision not to stop the repayment of your Hardship Payment if between January, 1, 2014 and January, 11, 2021 you asked Universal Credit or DWP Debt Management to waive the repayment of a hardship payment, or reconsider the rate of recovery, and the DWP refused your request or refused to consider the request

Alongside this, you will also need to show that either you could not afford to repay the hardship payment at that time, or or it had a significant effect at the time on your or your family’s health or wellbeing – this means that it caused a health condition or made a health condition worse.