Cost of living payment: Thousands of Universal Credit claimants could be denied £301 for breaking DWP rules

Thousands of Universal Credit claimants could miss out on the £301 cost of living payment in May because they broke DWP rules.

Thousands of people claiming Universal Credit could miss out on getting the £301 cost of living payment this month because they broke Department for Work and Pensions (DWP) rules. Under the regulations, households will not be eligible for the first instalment of the £900 cost of living payment if they have a "nil award" during the qualifying period.

The qualifying period for the first cost of living payment is between January 26 and February 25. “A nil award” is where your Universal Credit amount is reduced to zero.

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You can be given a nil award for several reasons. One of those reasons is due to being sanctioned, which can happen if you break the conditions of your agreement - being sanctioned also reduces your Universal Credit payments for a period of time.

The DWP was recently asked by the Labour MP for Lewisham, Deptford Vicky Foxcroft to estimate the number of people who received a nil award during the qualifying period for the first cost of living payment. Mims Davies, parliamentary under secretary of state at the DWP, insinuated that the figure could be in the thousands in a written response.

The under secretary said 7,000 people were denied the previous cost of living payment last year after receiving a nil award due to sanctions. She said: "People are only sanctioned if they fail, without good reason, to meet the conditions they agreed to.

"97.6 per cent of sanctions in the quarter to October 2022 were applied for failing to attend a mandatory appointment at a Jobcentre. These sanctions can often be resolved quickly by claimants getting in touch and attending their next appointment.

"If someone with no Universal Credit award due to a sanction re-engages with us they may get one of the later cost of living payments."

If you are sanctioned, then you could lose from 20% to 100% of your standard allowance for Universal Credit. Ms Davies said that as the Government is delivering three cost of living payments in 2023,, it reduces the chance of someone "missing out altogether" due to nil awards.

 A Universal Credit sign in the window of the Job Centre in Westminster. A Universal Credit sign in the window of the Job Centre in Westminster.
A Universal Credit sign in the window of the Job Centre in Westminster. | Getty Images

The £900 cost of living payment was announced in Chancellor Jeremy Hunt’s Autumn Statement and aims to help people on lower incomes amid rocketing food and energy costs. If you qualify for the payments, you should get:

  • £301 paid between April 25 and May 17 for most people on DWP benefits
  • £301 paid between May 2 and 9 for most people on tax credits and no other low-income benefits
  • £300 paid during autumn 2023 
  • £299 paid during spring 2024

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