Written evidence from the Public Law Project CLP0056

Public Law Project: 

Public Law Project (PLP) is an independent, national, legal charity focused on improving access to legal remedies where such access is restricted by poverty, discrimination or administrative burdens.

One of PLP’s priority areas is achieving a just and non-discriminatory welfare system with a particular focus on benefit sanctions and deductions. Our experience in this area includes casework support in individual cases, strategic litigation to challenge systemic issues, providing training and carrying out research[1]. PLP has previously released the briefing for the Social Security (Additional Payments) (No. 2) Act 2023 (“the Act”) and one of our recommended amendments was tabled (extending the qualifying period to two months), but regrettably not implemented.

This submission will focus on how claimants with “nil award” are being double punished by the design of the Act and possible scenarios for the Committee to investigate.

What role has receiving a nil reward on a Universal Credit payment, due to reasons such as sanctioning played in access to the cost-of-living support payments (Question 2):

To qualify for the Cost of Living Payment, the claimant must be entitled to at least 1p in the month preceding the date specified by the Secretary of State[2]. Many of those who have a sanction imposed receive a ‘‘nil’’ award, which means they do not receive the payment, despite having an underlying entitlement to Universal Credit for that period.

Universal Credit (‘‘UC’’) recipients are usually sanctioned for minor failings, such as missing or being late to an interview (98.4% of all sanctions)[3]. These normally result in the full UC entitlement being taken away for a certain period[4]. Although the Government do not currently publish data on the length of universal credit sanctions (last updated in 2021[5]), Dr David Webster estimated that the average length of sanctions has risen to around 11–12 weeks[6]. This suggests that more claimants would not get the payment because of receiving a £0 universal credit payment in a given month.

Last year, the estimated number of households denied the cost-of-living payment solely due to the sanction was 6600[7]. The overall number of households which did not receive the payment due to its members having a nil award was, however, 12,200. The difference in these numbers constitutes people whose nil award was attributed to different reasons, as opposed to only sanctions. Given the spike in the level of sanctions, it is reasonable to presume these numbers will be higher[8].

DWP’s only explanation for this situation was that the unsophisticated character of the payment system made inclusion impossible[9]. PLP’s position is that the administrative difficulty of issuing the payment is not a sufficiently good reason for excluding those who need it from lifeline support. This issue was raised a year ago when the equivalent policy for 2022/2023 was introduced, which has provided sufficient time to adjust the system.

Depriving sanctioned UC recipients of the cost of living payment effectively leads to a double punishment for whatever (usually minor) misstep was the basis for the sanction; first the person’s UC entitlement is suspended, then they are excluded from additional vital support. In the criminal context, the right not to be tried or punished twice for the same offence is a fundamental human right.

Sanctioned claimants who have had their UC entitlement suspended are, by definition, one of the most vulnerable groups. it is vital that these individuals are not excluded from life-line support.

Another concern is that people, who are serving an unlawful UC sanction (applied for wrong reasons, e.g., despite a good reason for the non-attendance or contrary to claimants' commitments) might also have been denied payments. Although the Government undertook[10] to award the payment retrospectively for those who successfully appeal the sanction, this is not a straightforward process.

The latest government data[11] show that if the decision reached the First-Tier Tribunal, the success rate was strikingly high (81%). The number of such cases was, however, minuscule (0.3% of all decisions, compared with 16% reaching the “mandatory reconsideration” stage). Claimants indicated they refrained from challenging the sanction out of the fear of retaliation, whilst some felt there was “no point” in disagreeing with the system they viewed as inherently skewed against them[12]. This suggests that even if incorrectly applied sanctions lead to the lack of payment, this will not necessarily be appealed.

It would be worth inquiring whether any retrospective payments as a result of successfully challenging sanctions have been made in the past.

Case study:

PLP has recently come across the claimant who has been sanctioned since before December 2022. He is a diabetic, struggling with mental health problems. He has no money to live on and relies on support from friends. His hardship has not been alleviated via the Cost of Living payments because the sanction.

This illustrates the paradox of living the most vulnerable people without the support and double punishment associated with the 1p rule.

Scenarios to consider and technical issues to investigate (Question 2e):

1. Potential discrimination.

There is a potential discrimination concern, given that people who receive other elements of Universal Credit (childcare allowance, housing benefits) will still be eligible for the Cost of Living payments despite being in comparable situation (being sanctioned). Those would be people who do not have children and live with friends/family members. Such people could be overrepresented in groups such as people with disabilities or young people living with parents.

2. Managed payment to the landlord.

According to the impact assessment for one of the rounds of payments “a nil award has been defined as the household having received £0 after all elements, adjustments and reduction have been taken into account but prior to deductions and managed payment to landlord”.

This indicates that sanctioned claimants with “managed payment to the landlord” would still receive the payments. This seems difficult to reconcile with the rationale for the 1p rule, which suggests that the system makes the payment based on at least 1p payment to the given account: “you have had a payment in a qualifying month, and then that triggers the payment on the system”[13]. It would be worth clarifying whether people in this situation would receive the payment and, if yes, how it was made possible within the system.

3. Discretionary Schemes.

The DWP suggests that the Household Support Fund[14] would be a suitable alternative for people not receiving the payments. However, PLP is concerned that the level of support will be more modest, uncertain and dependent on a particular Local Authority.

4. ESA Claimants.

Those who receive contributory Employment Support Allowance (“ESA”), rather than Universal Credit, will not receive the Cost of Living Payment as it is not a means-tested benefit. The rationale for excluding this group is that they “may” have financial resources available to them[15]. However, many people on contributory ESA have health problems or are disabled, which are the groups most affected by the cost of living crisis[16]. PLP’s position is that the impact of denying support to this group should be thoroughly examined.

May 2023