The problems with benefit sanctions
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Marc Bloomfield
Description: PLP
It took our client, B, over two years to untangle the financial mess caused by six unsubstantiated benefit sanctions. Benefit sanctions are disastrous for mental health,1Evan Williams, ‘Punitive welfare reform and claimant mental health: the impact of benefit sanctions on anxiety and depression’, Social Policy & Administration, vol 55 issue 1, January 2021, page 157. See also Evan Williams, ‘The impact of DWP benefit sanctions on anxiety and depression’, LSE British Politics and Policy blog, 24 June 2020. put people into debt,2Final findings report: Welfare Conditionality Project 2013–2018, Welfare Conditionality, June 2018, page 23. and there is little evidence that they work.3Benefit sanctions, HC 628, National Audit Office, 30 November 2016, pages 7 and 38–39. B was wrongly sanctioned for over a year and a half, during which time she struggled to afford food. As a result, she was in debt to friends and family, had rent arrears, and owed over £2,000 in recoverable hardship payments (RHPs) to the Department for Work and Pensions (DWP). Unlike with jobseeker’s allowance and employment and support allowance, universal credit hardship payments generally have to be paid back to the DWP (by deductions to universal credit) unless a claimant’s earnings exceed a particular threshold for a certain period of time.
Despite her financial difficulties and the deterioration in her mental health caused by the sanctions, the DWP initially refused B’s request to waive her debt, stating that the law put it under a duty to recover RHPs. Only after PLP brought a judicial review claim on B’s behalf did the DWP concede that it had a discretion to waive hardship payments, regardless of whether the earnings threshold was met. The DWP has now changed its guidance to make this clear (see Benefit overpayment recovery guide, DWP, last updated 12 May 2021, paras 5.83 and 8.1).
Separately from this, a First-tier Tribunal overturned all six of B’s sanctions due to a lack of evidence, and the DWP had to pay back the money it had wrongly deducted from her benefit (see PLP’s Twitter thread from 27 October 2020 about the tribunal hearing). Like most claimants who appeal their sanctions, B was successful at the tribunal whereas she had been unsuccessful at mandatory reconsideration stage.4Statistics published in 2018 showed that 72 per cent of universal credit mandatory reconsiderations resulted in a sanction being applied, but at tribunal appeal, only 19 per cent of universal credit sanction decisions were upheld: Benefit sanctions. Nineteenth report of session 2017–19, HC 955, 6 November 2018, page 47, footnote 221. Despite the high success rate, only a small proportion of decisions to impose a sanction are challenged – the subject of a new PLP research project that seeks to understand why there are so few appeals.
Notwithstanding B’s success in her judicial review, and being vindicated by her tribunal appeal, the DWP initially still refused to waive her £2,000 hardship payment debt. It took PLP threatening a second judicial review before the DWP accepted that recovering the money would be detrimental to B’s health and welfare, and that her debt would be written off.
If sanctions are overturned, hardship payment debt should be too
In B’s case, the DWP initially argued that, because her sanctions had been overturned on appeal, the discretion to waive hardship payments did not apply. This went directly against the comments made by Chris Grayling MP, then minister of state at the DWP, during the passage of the Welfare Reform Bill:
[W]hen somebody has been sanctioned through a mistake or through no fault of their own, they have the right to appeal. If they are successful at appeal, their previous financial position will be reinstated, and there will certainly be no question of recovering any hardship payment that had been made (Hansard HC Debates, Welfare Reform Bill, Public Bill Committee, 26 April 2011, col 511).
On this Grayling was right: fairness demands that RHPs should be waived in all cases where sanctions have been found to be wrong following mandatory reconsideration or a tribunal appeal. It is right that the DWP rectify the consequences of an erroneous sanction — by both paying back the lost income and waiving debt the individual has taken on to make ends meet.
Procedural fairness demands that appeals be heard before a sanction is imposed
Recent changes made to the DWP’s sanction procedure,5The details of these were revealed in the 1 December 2020 response by the DWP to a Freedom of Information Act Request made by Frank Zola on 18 November 2020 and are helpfully summarised on pages 6–7 of Child Poverty Action Group’s February 2021 briefing on benefit sanctions by Dr David Webster (published on 11 March 2021). including the introduction of more robust internal checks before a sanction is imposed, may help reduce the number of unsubstantiated decisions. Greater procedural fairness would be achieved by giving claimants a right to appeal their sanctions to an independent decision-maker before they are imposed rather than after the damage has been done, as PLP’s Alison Pickup has argued (see April 2020 Legal Action 11). While the financial impact of B’s sanctions has now largely been rectified, the impact they had on her personally cannot be undone.
PLP has published a note for advisers on the DWP guidance change. Benefit sanctions is one of PLP’s focus areas and our new Welfare Rights Hub coordinator is Olivia Mowll. PLP research fellow Caroline Selman will shortly begin a research project into why people don’t appeal benefit sanctions.
 
1     Evan Williams, ‘Punitive welfare reform and claimant mental health: the impact of benefit sanctions on anxiety and depression’, Social Policy & Administration, vol 55 issue 1, January 2021, page 157. See also Evan Williams, ‘The impact of DWP benefit sanctions on anxiety and depression’, LSE British Politics and Policy blog, 24 June 2020. »
2     Final findings report: Welfare Conditionality Project 2013–2018, Welfare Conditionality, June 2018, page 23. »
3     Benefit sanctions, HC 628, National Audit Office, 30 November 2016, pages 7 and 38–39. »
4     Statistics published in 2018 showed that 72 per cent of universal credit mandatory reconsiderations resulted in a sanction being applied, but at tribunal appeal, only 19 per cent of universal credit sanction decisions were upheld: Benefit sanctions. Nineteenth report of session 2017–19, HC 955, 6 November 2018, page 47, footnote 221. »
5     The details of these were revealed in the 1 December 2020 response by the DWP to a Freedom of Information Act Request made by Frank Zola on 18 November 2020 and are helpfully summarised on pages 6–7 of Child Poverty Action Group’s February 2021 briefing on benefit sanctions by Dr David Webster (published on 11 March 2021). »

About the author(s)

Description: Emma Vincent Miller - author
Emma Vincent Miller is a lawyer at Public Law Project.