Government Denies £4 Million Cost of Living Support from Sanctioned Welfare Claimants

Government Denies £4 Million Cost of Living SupportFrom Sanctioned Welfare Claimants

Punitive sanctions are compounding the financial problems of some of the most vulnerable people, reports Nic Murray

Thousands of Universal Credit claimants, some of the hardest hit by the cost of living crisis, have been denied £4 million pounds of vital financial support thanks to sanctions imposed by the Department of Work and Pensions (DWP), Byline Times can reveal. 

Data obtained by a Freedom of Information (FOI) request indicates that 12,400 people claiming Universal Credit were denied the first £324 of the Government’s £650 Cost of Living payment in July due to being sanctioned. All individuals on Universal Credit were entitled to receive £324 unless they had a ‘nil award’ during the qualifying period (26 April to 25 May), meaning that their monthly benefit payment was reduced to zero over this time. 

The public guidance on the availability of the scheme stated that claimants with nil awards due to deductions or rent payments made directly to their landlord from their Universal Credit, might still be eligible, but made no mention of sanctions disqualifying claimants from support. 99% of sanctions are as a result of failing to attend a ‘work-focused interview’ – essentially a meeting between a claimant and their work coach about their ongoing job search – and on average last for 29 days.

In other words, for a single adult aged over 25, one missed appointment this April could have cost them hundreds of pounds. 

“It’s disgraceful that tens of thousands of people are being denied crucial funds – especially now, in this climate, where people cannot put food on the table or heat their homes,” Marc Francis, Z2K’s Director of Policy and Campaigns, told Byline Times.

This comes on top of the half a million people estimated to have been denied the payment because of a technicality meaning their income was temporarily too high to receive a cost of living payment.

When the £650 support package was first announced in May by former Chancellor Rishi Sunak, it was in recognition of the “tough decisions” that many people on Universal Credit could face in the coming months, due to inflation far outstripping the 3.2% uprating of all benefits received in April.

Sunak’s successor Kwasi Kwarteng has now committed to further tighten Universal Credit sanctions – promising that “we will make work pay by reducing people’s benefits if they don’t fulfil their job search commitments” – while suggesting that benefits will not rise with inflation.

Rather than a tool to promote economic growth, Francis adds that sanctions are simply “a punitive policy that push people further into poverty. Denying those with a sanction the cost of living payment, during a cost-of-living crisis, is truly punishing.”

The DWP has now confirmed that the second £326 cost of living support payment will be sent out in mid-November, with the same qualifying criteria in place.

A DWP spokesperson said that “it is right that people who can work, are encouraged to take up employment and people are only sanctioned if they fail, without good reason, to meet the conditions they agreed to. More than eight million low-income households have received the first Cost of Living payment. Those with a Universal Credit ‘nil award’ during the qualifying period who weren’t eligible could be entitled retrospectively if a sanction is successfully appealed.”

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A Callous Approach

Some 103,000 people on Universal Credit are currently subject to a sanction. That this figure is now at a record high and rising month-on-month is due to the increased zealousness with which this Government is using sanctions to encourage jobseekers to fill 1.2 million vacancies across the country.

In January, ministers launched Way to Work, a six-month campaign aiming to get 500,000 people into work by June by requiring new claimants to search more widely for available jobs earlier into their claim or risk sanctions. This is despite the fact that the DWP itself has also repeatedly refused to release commissioned research into the impact and effectiveness of sanctions. 

All available evidence suggests that rather than helping to secure employment, stopping someone’s benefits for failing to attend a ‘work-focused interview’ has substantially negative financial, physical and mental health impacts, while also potentially pushing them further from the job market. Continuing to do so during a cost of living crisis, alongside denying targeted financial support, looks set to only exacerbate these adverse effects. 

One person potentially at risk of this double punishment is David (not his real name), whose Universal Credit is currently stopped for four weeks after missing an appointment with his work coach in August due to illness.

“I had missed appointments before when I was street homeless, and thought being ill was a reasonable excuse, but no. Two weeks later, no note on my Customer Journal asking for an excuse, just the whole payment was stopped. Absolutely nothing, the whole door’s been closed on me” he told Byline Times. “This has actually put me into an extremely dark place where I just don’t know where the next proper meal is going to come from or when I’ll be able to get credit or wash my clothes.”

A survey run by the Independent Food Aid Network (IFAN) found that 22 of 68 organisations running independent food banks stated that they were seeing benefit sanctions as a reason for rising demand between April and August. Sabine Goodwin, Coordinator of IFAN, said that “the withdrawal of already insufficient payments is increasing hardship and destitution and adding yet more pressure on people struggling to afford food as well as food aid charities trying their utmost to provide support.”

As energy bills rise further this month, the impact of any sanction will heighten, and the potential for it to disqualify someone from financial support will appear all the more callous.

“You wake up every day when you’re not eating, cold and shaking,” David says. “I’ve eaten a couple of spoons of sugar just to get some glucose and the energy to do something. I’m not the only one in this situation asking ‘what have I got?’”