The Department for Work and Pensions (DWP) said it was “reviewing” its policy on hardship repayments and was offering Universal Credit claimants across England, Scotland and Wales who had to pay a chance to have the money returned to them. Sometimes someone can have their Universal Credit cut due to a sanction or penalty for fraud, and if they need extra money to get by the DWP can provide them with a “hardship payment”. A hardship payment is a loan and people usually have to pay it back when their sanction ends.
However, according to recent guidance published by the DWP people who paid back their hardship payment and were refused by the department to have the repayment “waived” can apply for a refund.
The review by the DWP would be for repayments over a seven-year period, from January 1, 2014, up to January 11, 2021.
In order to get the refund, Universal Credit claimants will need to collect and provide evidence in their application.
The evidence will need to prove that someone could not afford to repay the hardship payment at that time, and that repaying it had a significant effect on their or their family’s health or wellbeing.
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This means that it caused a health condition or made a health condition worse
The DWP stated that the applications will open on Monday, December 19 and it will only be taking applications from this date.
DWP guidance warns that applications received before that date will not be accepted and that people must apply before June 19, 2023.
This evidence can include things such as bank statements, information about loans or letters from creditors.
It can also include information from a doctor or other medical professional saying that repaying the money caused a health condition or made it worse.
People will also need to provide information about their income and living costs at the time.
People can still apply without the evidence however, the DWP says including “as much information as possible” will help someone’s application.
Once the evidence is collected people will need to send the form to Debt Management (C), Mail Handling Site A, Wolverhampton, WV98 2DF.
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After this, the DWP will use the information provided in it to make its decision on whether someone can get a refund of their Hardship Payment.
The department will contact someone within six weeks of receiving their application to let them know it has been received.
The DWP says it may sometimes have to contact people for more information.
If the DWP decides someone should receive a refund, it will pay them the money they repaid with the department stating that the decision process may take around 13 weeks.
According to Citizens Advice, the amount people will receive through their hardship payment is usually around 60 percent of the amount a person was sanctioned by in the last month.
When people are repaying their hardship loan back to the DWP, they usually get less Universal Credit each month until they pay it all back.
The DWP will usually reduce someone’s payment by up to 25 percent of their standard allowance which is the basic amount someone can get.
On its website Citizen Advice explained: “If your payment is reduced by 25 percent of your standard allowance and your standard allowance is usually £334.91 a month, your total payment will be reduced by £83.73.”