‘Outrageous’: Fury as some Universal Credit claimants denied £326 cost of living payment

Charities have condemned the “outrageous” decision to deny some vulnerable Britons the emergency cost of living payment over benefit sanctions.

The first £326 payment was supposed to be given to around 8 million people in receipt of means-tested state benefits in July – but it emerged that some on Universal Credit have missed out.

Department for Work and Pensions (DWP) guidance for JobCentre staff told them to refuse the one-off payment to some who have been sanctioned, according to The Mirror.

The guidance is said to have told staff that those who Universal Credit was stopped due to a sanction during the “qualifying period” this spring – saying they “will not be entitled to a cost of living payment”.

Sanctions – which can see Universal Credit payments cut or stopped – can be imposed if staff decide they “fail to take all reasonable actions to find paid work”.

Mark Winstanley, chief executive of Rethink Mental Illness, said the government had to rethink the “outrageous” decision to allow the special payment to be withheld while energy bills and food prices soar.

“This decision compounds the distress sanctions cause, inflicting significant damage on people’s mental health,” said the charity leader.

Winstanley added: “The DWP must urgently review this decision and administer the cost-of-living payment to those affected as soon as possible to prevent unnecessary suffering and harm.”

Green party peer Natalie Bennett said it was “utterly indefensible – people who’ll have most desperate need of the help denied it”.

Marc Francis from the anti-poverty group Z2K Trust also urged the DWP to reconsider penalising those who have problems with their Universal Credit claim.

He said: “These one-off payments are designed first and foremost to ensure people aren’t left unable to afford to put food on the table food or freezing in their homes.”

Rethink charity said it was “alarmed” at the rise in sanctions. The latest figures, released on Tuesday, show that just over 186,000 sanctions were handed out between January and April of this year.

It is more than double the 74,000 penalties issued for the same period in 2019 before the Covid pandemic. The mental health charity said called on the DWP to put “an immediate end” to the “cruel” sanctions for those living with mental illness and disabilities.

The Z2K Trust said the sanctions’ regime was “notoriously over-zealous”, and left many people without any money for weeks on end – saying it was one reason why so many are turning to the food banks.

Food bank managers have told The Independent running out of sufficient supply of food parcels amid an “overwhelming” surge of new people falling into hardship.

It comes as the latest official figures show that real wages fell at a record rate of 3 per cent between April and June as inflation slashed the value of workers’ pay.

And food inflation has jumped to 11.6 per cent in the four weeks to early August – adding £533 to the average supermarket bill, according to Research firm Kantar.

Millions of Britons in receipt of benefits are entitled to receive a £650 cost of living grant under former chancellor Rishi Sunak’s plans, with the second instalment of £324 due to go out in the autumn.

But Sunak and his Tory leadership rival Liz Truss continue argue about the kind of extra support that should be available to ease energy bills in the autumn and winter.

Sunak has suggested he is considering further direct payments of around £5bn for the most vulnerable if he wins the Tory leadership contest. But Truss has yet to commit to any further “handouts”.

Truss was said to be considering whether the existing £400 government discount on energy bills this autumn – aimed at helping all households in the UK – could be better targeted. But a Truss campaign spokesperson said she would go ahead with the universal £400 payment.

A DWP spokesperson said those on Universal Credit who weren’t eligible for the cost of living payment could be entitled to the £326 “retrospectively” if a sanction is successfully appealed, and could still be entitled to the second instalment due in autumn.

“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,” said a spokesperson.

They added: “Sanctions can often quickly be resolved by re-engaging with the Jobcentre and attending the next appointment, and hardship payments are available as a safeguard to claimants who demonstrate that they cannot meet their immediate and most essential needs as a result of their sanction.”