Universal Credit hardship payment repayment obligation

Yes, a Universal Credit hardship payment is recoverable. It is not a grant. The Department for Work and Pensions will recover the amount by making deductions from your future Universal Credit payments.

How recovery works:

The hardship payment is treated as a recoverable hardship payment under regulation 116 of the Universal Credit Regulations 2013. The DWP will normally recover it by reducing your subsequent Universal Credit payments. The standard rate of recovery is usually around 40 per cent of your standard allowance, though this can vary depending on your circumstances and any other deductions already being taken from your award.

Key points to be aware of:

1. A hardship payment is only available where your Universal Credit has been reduced because of a sanction, meaning you have been found to have failed to meet a work-related requirement without good reason.

2. To qualify, you must demonstrate that you or your household are in hardship, that you have met all current work-related requirements, and that you have taken reasonable steps to access alternative sources of support.

3. The amount paid is typically 60 per cent of the reduction that has been applied to your award, or 80 per cent if you are in a household that includes a child or a pregnant woman.

4. Recovery begins once the sanction period ends and your full Universal Credit payments resume.

If you are struggling with the rate of recovery, you can contact the DWP to discuss whether the deduction rate can be reduced, particularly if you have multiple deductions being taken at the same time and this is causing further hardship. There is no formal right of appeal against the rate of recovery, but the DWP does have discretion to adjust it.

If your underlying sanction decision was wrong, you should also consider challenging that, because if the sanction is overturned on mandatory reconsideration or appeal, the basis for the hardship payment falls away and recovery should not continue.