Experimental ADM in HTML

This chapter contains guidance on recoverable hardship payments for UC and includes
1. what is hardship
2. the basic conditions to be in hardship
3. deciding if the claimant is in hardship
4. the period and amount of hardship and
5. the recovery of hardship payments.
What is hardship

L1002 Background

Hardship is not defined in legislation. It is for the DM to consider whether the criteria
set out in relevant legislation (1) are met so as to qualify the claimant as being in
hardship. In addition in UC, hardship payments can only be made when certain
conditions are met.

1 UC Regs, reg 116(2)

L1003

What constitutes hardship in UC is reflected in
1. the expectation that claimants investigate potential alternative avenues of
support that may be available to help themselves and their household out of hardship
2. claimant's households are expected to make efforts to reduce non-essential expenditure
3. limiting the essential needs to be considered to accommodation, heating,
food and hygiene needs only
4. a single fixed method to calculate the amount and duration of payment
5. a fixed period of payment requiring the claimant to continually demonstrate
they are still in hardship by re-applying for continued payment each
assessment period and
6. hardship payments being recoverable.

L1004 What are recoverable hardship payments

A recoverable hardship payment is an additional payment of UC that provides
financial protection for the household where the
1. amount of the claimant's award is reduced because of a
1.1 sanction
or
1.2 fraud penalty (see L1010) and
2. claimant
2.1 is
or
2.2
will be in hardship. 1 W R Act 12, s 28; UC Regs, reg 116

[L1005-L1009]

L1010 Fraud and loss of benefit penalties « L1004

The guidance in this chapter on hardship will apply in the same way to reductions in
benefit due to fraud or other penalties. For full guidance on loss of benefit penalties
see ADM Chapter B2 - Restrictions on payment of benefit - benefit offences. Where
reference is made to the UC regulations (1) please read the equivalent in the Social
Security (Loss of Benefit) (Amendment) Regulations 2012.
1 UC Regs, reg 116 - 119; 2 RUC Regs, reg 108

L1011 Reconsideration and Appeals

A claimant may request a reconsideration or subsequent appeal of a decision not to
pay hardship on the basis they are not in hardship but they cannot appeal the
amount payable as this is prescribed in legislation.

[L1012-L1015]

Conditions to be in hardship

L1016 Single claimants « L1017 « L1018 « L1045 « L1142

A claimant must meet all the following conditions to be considered for a recoverable
hardship payment (1)
1. their most recent payment of UC has been reduced as a result of a sanction (2)
(see note and L1020)
2. they are aged 18 or over (3) (see L1021)
3. they have met any compliance condition specified by the Secretary of State (4)
(see L1022)
4. they submit an approved application (5) (L1034)
5. they provide information and evidence as required to support their application (6)
(L1036)
6. they accept that any hardship payments are recoverable (7) (see L1033)
7. they have complied with all the work-related requirements that they were
required to comply with in the 7days preceding the day on which they made an
application for hardship (8) (see L1039)
8. the Secretary of State is satisfied that they are in hardship (9)
9.
the daily reduction rate for each assessment period of UC applies to the
sanction ( i.e. this means that hardship is only available where the sanction is
100% of the standard allowance of UC and not where the sanction is 40% of
the standard allowance)10.
Note: Most recent payment has been reduced includes a reduced first payment.
1 UC Regs, reg 116; 2 reg 116(1) (a); 3 reg 116(1)(a); 4 reg 116(1)(b);
5 reg 116(1)(c); 6 reg 116(1)(d); 7 reg 116(1)(e); 8 reg 116(1)(f); 9 reg 116(g) ; 10 reg (11)6(1)(h)

L1017 Joint-claim couples « L1018 « L1033 « L1045 « L1142

Joint -claimants must meet all the following conditions to be considered for a
recoverable hardship payment (1)
1. their most recent payment of UC has been reduced as a result of a sanction (2)
(see L1016 1. and L1020)
2. the member of the couple who is sanctioned is aged 18 or over (3) (see L1021)
3. they both have met any compliance condition specified by the Secretary of
State (4) (see L1022)
4. either one can submit an approved application (5) (L1034)
5. either one can provide information and evidence as required to support their
application (6) (L1036)
6. they both accept that any hardship payments are recoverable (7) (see L1033)
7. they both have complied with all the work-related requirements that they were
required to comply with in the 7days preceding the day on which they made an
application for hardship (8) (see L1038)
8. the Secretary of State is satisfied that they are both in hardship (9) (see L1039)
1 UC Regs, reg 116; 2 reg 116(1)(a);3 reg 116(1)(a); 4 reg 116(1)(b)
5 reg 116(1)(c); 6 reg 116(1)(d); 7 reg 116(1)(e); 8 reg 116(1)(f); 9 reg 116(g)

L1018 Conditions satisfied

When all the criteria at L1016 or L1017 are met the DM then has to be satisfied that
a single claimant or joint claimants are in hardship (1) by considering whether the
claimant or each joint claimant
1. are in hardship only because they cannot meet
1.1 their immediate, essential and most basic needs or
1.2 the immediate, essential and most basic needs of a child or qualifying
young person for whom they are responsible (2)
as a result of the sanction or fraud penalty having reduced their award
2. have made every effort to access alternative sources of support to meet or
partially meet such needs (3)
3. have made every effort to cease to incur expenditure which does not relate to
such needs (4).

1 UC regs, reg 116(1)(g); 2 reg 116(2)(a); 3 reg 116(2)(b); 4 reg 116(2)(c )

L1019

Immediate, essential and most basic needs are defined as
1. accommodation (see L1061)
2. heating (see L1066)
3. food (see L1076) and
4. hygiene (1) (see L1081et seq).
1 UC regs, reg 116(3)

L1020 Reduction in force « L1016 « L1017

A claimant over 18 years old cannot be in hardship unless they have received a
payment that is
1. subject to a higher, medium or lower level sanction (1) or
2. reduced by the equivalent reduction rate made for fraud or loss of benefit
penalties (2).
Note: `Received' includes where no payment is made because the award is wholly
reduced by a sanction or by the sanction in conjunction with other deductions such
as earnings or income or is reduced because of fraud or loss of benefit penalties
and where a first payment is reduced because a sanction is imposed before any UC
is actually paid.

1 UC regs, reg 116 (2)(a)(i); 2 SS (Loss of Benefit)(Amendment) Regs 2012; SS Fraud Act 2001

L1021 « L1016 « L1017

A claimant whose UC is sanctioned for a lowest level failure such as failing to attend
a WFI, cannot receive hardship. These claimants continue to receive 60% of their
standard allowance for the duration of the sanction and can have the open ended
sanction brought to an end if they participate in the interview (1).
Note: For guidance on lowest level sanctions see ADM Chapter K5 - Low level
sanctions.
1 UC regs, reg 105

L1022 16 and 17 year olds « L1016 « L1017 « L1033

A claimant or member of a joint-claim couple who is aged 16 or 17 years old cannot
receive hardship because all sanctions for these claimants are applied at a lower
reduction rate and they continue to receive 60% of their personal allowance for the
duration of the sanction.
Note: A sanctioned claimant may have access to hardship if they are aged 18 years
or over and part of a joint-claim couple where their non -sanctioned partner is 16 or
17 years old.

L1023 Compliance conditions met

To receive a recoverable hardship payment the
1. sanctioned claimant
or
2. each of the joint-claimants in a couple
who is subject to a low level sanction must meet any compliance conditions set (1)

1 UC Regs, reg 116(1)(b); reg (10)4 (2)(a)(i)

L1024

This will normally mean addressing the action or failure that led to the sanction. For
example,
1. re-engaging with the WP
2. attending training they were required to undertake
3. attending a WFI
Note: If a claimant has not met their compliance condition they have not met one of
the conditions for hardship (1) and so will not be entitled to a recoverable hardship
payment.

1 UC Regs, reg 116(1)(b)

L1025

A claimant may have to undertake alternative activities that are specified where it is
not feasible for the claimant to complete or address the original action. For example:
where without good reason the claimant failed to attend a mandatory training course
that is no longer available (see ADM Chapters K1 - K9 for guidance on sanctions).

L1026

It is up to the DM in each individual case to be satisfied the claimant or joint-claim
couple have met a compliance condition (1).

L1027

Apart from meeting the compliance condition in the cases of low level failures there
is a separate requirement to have met all work-related requirements which relates
specifically to the 7 days prior to making the application for a recoverable hardship
payment (see L1039).
1 WR Act 12, s 27

[L1028-L1029]

Application, information and evidence

L1030 Application

The claimant or either of the joint-claimants must complete an application for a
recoverable hardship payment which is
1. approved by the Secretary of State or in such a form as he accepts is
sufficient and
2. submitted in such a manner as the Secretary of State determines (1)
(also see L1032 and L1033).

1 UC Regs, reg 116(1)(d)

L1031 « L1062 « L1069

Initial contact is most likely to be :
1.over the phone to the Contact Centre or
2. in person at the JCP office.
Claimants will then normally be required to attend an appointment at their local JCP
office to provide further information and evidence in support of the application.

[L1032]

L1033 Joint-claim couples « L1016 « L1017 « L1030

The DM must be satisfied that both members of the joint-claim couple have
1. complied with any work-related requirements as required (1) within 7 days before
they submit the application (see L1039) and
2. met any compliance condition if relevant (2) (see L1022) and
3. acknowledged that any payment is recoverable (3).
Note: see L1017 for conditions to be in hardship for joint-claim couples.
1 UC Regs, reg 116(1)(f); 2 reg 116(1)(b); 3 reg 116(1)(e)
L1034 - L1035

L1036 Information and evidence

Supporting information and evidence will be required to validate the application for
hardship (1), which includes
1. general information on the household and what resources claimants have a
their disposal to meet their basic needs
2. their efforts to support themselves and their household by seeking alternative help
3. steps taken to reduce costs in relation to non-essential costs and
4. the reason for the claimant being in hardship, i.e. which of the basic and
essential needs they are unable to meet immediately.
Note: The information and evidence required from a joint-claim couple would need
to relate to them both and the household but either one can provide it.
1 UC Regs, reg 116(1)(d)
L1037 - L1038

L1039 Compliance with work- related requirements « L1016 « L1017 « L1027 « L1033

To receive a recoverable hardship payment, in the seven days prior to the date of
applying for hardship, a claimant or both members of a joint-claim couple must have
met all the work-related requirements they are required to meet, as will usually be
detailed in their Claimant Commitment (1).

1 UC Regs, reg 116(1)(f)

L1040

A claimant cannot receive hardship if there is an outstanding doubt they have
recently failed to meet their work-related requirements in the 7 day period prior to
submission of the application.
Note: The outstanding decision should be prioritised so that if UC is reduced the
hardship determination can be considered.

[L1041-L1044]

Deciding if the claimant is in hardship

L1045 What the DM considers

Where a claimant, or both members of a joint-claim couple meet the criteria outlined
at L1016 and L1017, the DM has to consider whether the claimant's circumstances
mean they are unable to meet their immediate basic and essential needs (1).

1 UC Regs, reg 116(2)

L1046

The only needs the DM takes into account as placing a claimant or their household
at risk of being unable to meet their immediate basic and essential needs are
1. accommodation costs (see L1061)
2. heating costs (see L1066)
3. food costs (see L1076) or
4. hygiene needs (see L1081)1.
Note: These are the basic and essential needs. What varies is what an individual
may require in order for that need to be met, for example, a sick person may need
more heating as they may have more complex and more expensive needs.

1 UC Regs, reg 116(3)

L1047

Immediate means that the claimant, or both members of a joint-claim couple, are
unable to satisfy their households basic and essential needs at the point of
application. Where the claimant has children, immediate will be interpreted to mean
within a week, i.e. for the next 7 days. This prevents the claimant from worrying, for
example, that they won't have sufficient food to feed their children the next day.
Note: If a claimant cannot demonstrate hardship at the point of application (allowing
for 7 days for those with children) then the application should fail and the claimant
should be told to re-apply when they can demonstrate hardship.

L1048

All of the circumstances of the claimant and their household must be considered
when deciding if the claimant is in hardship. Each case should be considered
carefully and DMs should bear in mind that an item or expense that is not necessary
for one individual to meet their basic and essential needs may be necessary for
another, for example: person A's basic and essential heating may be met even
though they have no heating because it is August but at the same time and under
the same circumstances person B's heating needs are not met because they live in
a draughty house and have a health condition.

[L1049]

L1050 Claimants less likely to suffer hardship

Healthy adults may be at less risk of suffering hardship if they do not have sufficient
essential needs for short periods of time but each case should be considered on its
own merits.

Example

Des is a single man aged 25, who lives alone and has no health problems. He
claims UC in August and the DM decides he left his previous job without good
reason and so a sanction is imposed. UC is not paid. Des makes an application for a
recoverable hardship payment. He heats his flat by gas and says he has no money
to put in his gas meter. He has an electric cooker. The DM considers that the lack of
heating in August for a fit single man would not lead to Des being unable to meet his
basic and essential needs. In other words, despite the gas heating being unavailable
his heating needs are still met.
The DM considers if there are any other circumstances that may lead to hardship for
accommodation, food or hygiene needs.

L1051 Claimants more likely to suffer hardship

People who
1. have children in the family
2. have health problems
3. have caring responsibilities (the greater the caring responsibilities the greater
the likelihood of hardship)
4. have disabilities
5. are pregnant or
6. are seriously or chronically ill (see L1053)
may be more likely to be unable to meet basic and essential needs as a result of a
sanction as they may have more complex and more expensive needs.

Example

Marilyn claims UC. She is a single parent with two children aged 9 and 11. She has
a part-time job which pays her £20 per week. The DM decides that Marilyn failed to
comply with her requirements without good reason by failing to register with a
national employment agency as part of her work search requirement by the day
before she is next due to attend the Jobcentre on 20.11.13 and so is sanctioned and
her UC payment is reduced.
Marilyn makes an application for a recoverable hardship payment. The family's only
income is CHB for the children and her part time earnings of £20 per week. She
states she has sufficient food for a week in her freezer. The DM decides Marilyn has
sufficient food for her family for a week. She will be able to buy fresh food such as
bread and milk using her part time earnings. The CHB is disregarded when
considering hardship. The family would not suffer hardship because of a lack of food
until the end of a week.
See L1147 for guidance on how to calculate the period of hardship.

L1052

Most likely there will be overlap in which aspect of the four areas of needs a
claimant is unable to meet. For example: while sanctions do not directly reduce the
UC housing component, a claimant may have spent the benefit they did receive on
ensuring they had food and are thus unable to pay the rent and risk falling into
arrears and may face eviction. In this situation the claimant may be considered to be
in hardship. See also L1070 - L1072.

L1053 Seriously ill « L1051

Seriously ill is not defined in legislation. The term is given its normal everyday
meaning of being an important, significant or severe illness (1).

1 R(SB) 19/82

L1054

Illnesses such as colds or coughs are not normally serious but the DM should decide
if an illness is serious for the individual person concerned and whether this impacts
on any of the four areas of basic and essential needs. For example someone who is
seriously ill may have more complex and more expensive needs and require more
heating or have increased hygiene costs.

L1055

The DM must determine if a serious illness exists at the date of the application for
hardship and not try to determine if a serious illness is likely to occur. The claimant
can re apply if their condition appears to be worsening.

L1056

If the DM has doubts if a person in the household is seriously ill the claimant should
be asked to provide evidence from a doctor or health care professional.
Note:
If the sanctioned claimant is seriously ill then they might fall into the no work-
related requirement conditionality group and sanctions may be reduced to nil. See
ADM Chapter J2 for guidance on the conditionality groups for UC.

L1057 One member of joint-claim couple seriously ill

Where one of a joint-claim couple is seriously ill but the other is subject to full work
search requirements the benefit unit must continue to meet their labour market
requirements (i.e. the normal conditions for receiving UC) in order to receive a
recoverable hardship payment.

L1058

- L1060.

L1061 Accommodation costs « L1019 « L1046 « L1096

Where the claimant or joint-claim couple state they are at risk of losing their
accommodation, the DM should establish
1. the reason, e.g. rent arrears,
2. the cost of their current housing
3. any resources at their disposal including temporary arrangements with
relatives and friends
4. what the housing element of their UC has been spent on and
5. the composition of the claimant's household, that might include
5.1 a person with a health condition or disability
5.2 dependant children
5.3 an adult for whom the claimant provides care or
5.4 a person who is pregnant.
Note
: Claimants cannot show hardship in relation to accommodation costs because
they have had an amount deducted for their housing element due to under
occupancy (see ADM Chapter F2 - F4 on Housing Costs).

L1062

The appropriate evidence to support the claimant's situation and that they are unable
to meet these costs might include
1. a rent book,
2. a letter from the landlord, letting agent or lender
3. the department's claim records
4. any supporting information or evidence on their available resources (see L1031)
5. any supporting evidence or information of their attempts to find other housing
or
6. a doctor or healthcare professional's letter.
Note: See also guidance at L1089.

[L1063-L1065]

L1066 Heating costs « L1019 « L1046

When the claimant or joint-claim couple state they are unable to cover costs for
heating their home, the DM should establish
1. the method of supply and payment ( for example: monthly, quarterly, direct
debit, budget plan, standing order, meter payment card etc)
2. when the last bill was paid and when the next is due
3. when the supply will exhaust or be cut-off if not paid
4. the composition of the claimant's household that might include
4.1
a person with a health condition or disability
4.2 dependant children
4.3 an adult for whom the claimant provides care or
4.4 a person who is pregnant.

L1067

The time of year must be considered as lack of heating is generally only likely to
cause problems at certain times of the year, i.e. when the application for hardship is made
1. between November and March (although decisions should reflect local
weather conditions) or
2. where there is an extended period of cold weather, i.e. the temperature is
recorded as 0oc or below.
Note: The condition at 2. is the trigger point for Cold Weather Payments.

L1068

If the application is made
1. during the summer months or
2. a period of warm weather
it may be difficult for the claimant to justify their assertion that they cannot meet their
needs unless their household compromises of someone who has special needs or
the condition of the dwelling is such that the inhabitants are more likely to suffer from
a lack of heating despite prevailing weather conditions.

L1069

The appropriate evidence to support the claimant's situation and that they are unable
to meet heating costs might include
1. the energy supplier's statements, bills or letter regarding the status of supply
2. a doctor or health care professional's letter verifying they need a particular
level of heating
3. any supporting information or evidence on their available resources (see L1031)
4. the department's claim records, such as deductions for fuel arrears.

L1070 Other fuel costs « L1052

Other fuel costs may link to food or hygiene needs for example running electrical
equipment such as a
1. washing machine
and
2. cooker to cook raw food or
3. fridge or freezer to keep food cold or frozen until needed.

L1071

These needs may arise irrespective of weather conditions and are linked closely to
1. food costs (see L1076) and
2. hygiene costs (see L1081).
For example it is no use providing food if the claimant can't cook it or keep it cold or
frozen until needed and it would not be easy for someone to keep their clothes and
bedding clean with cold water.

L1072 « L1052

Most likely there will be overlap in which aspect of the four criteria areas of needs a
claimant is unable to meet. Each case should be determined on its own merits and
all the individual circumstances taken into consideration regarding the four essential
criteria which are the basic and essential needs.

[L1073-L1075]

L1076 Food costs « L1019 « L1046 « L1071 « L1077

Regular basic nutrition is essential to maintain health. A claimant or joint-claim
couple may state that as a consequence of a sanction being imposed on their UC
they have no
1. food of their own or
2. access to any food or
3. the means to prepare and store it
to meet immediate basic nutritional needs for themselves and their household for the
immediate future.

L1077

Where L1076 applies the DM should establish
1. when did the claimant last shop for food for the household
2. the period this shopping was designed to cover and any reasons for running
out of food any earlier
3. the nature of any special dietary requirement of any member of the household
because of a medical condition.

L1078 « L1092

The claimant should be regarded as being in immediate hardship if they have
insufficient resources to provide meals for the coming week where they
1. have responsibility for a child or qualifying young person
2. provide care for an adult
3. or someone in the household is pregnant or
4. have in the household a person with a health condition where a lack of food
would cause suffering.
Note:
Claimants are not expected to rely on food banks to meet their food needs
(also see L1091).

L1079

Where possible the claimant should present receipts but in practical terms the
claimant's testimony may be the only source of information available.
L1080.

L1081 Hygiene costs « L1019 « L1046 « L1071 « L1102

Where as a result of a sanction being imposed on a claimant or joint-claim couple's
UC they assert they have no immediate resource to meet their or their households
hygiene needs, the DM should establish
1. what products or services they require (for example: sanitary
products, nappies, toilet paper, soap, detergents, laundry services, washing
machine etc) and
2. whether these items or services are available free or via alternative
sources (for example: immediate family, doctors or health centres etc).

L1082

Each case should be determined on its own merits and any special needs verified by
a letter from the person's GP or health care professional unless this information is
already available from the UC claim records.
L1083.

L1084 Efforts to access alternative support to meet needs

Claimants are expected to investigate potential alternative avenues of support that
may be available to help themselves and their household (1). The DM has to consider
1. what is reasonable in the individual circumstances and
2. whether claimants have explored alternative support that might be open to them
to help them meet, or partially meet, their household's basic and essential needs.

1 UC Regs, reg 116 (2)(b)

L1085

What is regarded as reasonable for a claimant to do may well vary
1. in each individual case and
2. over time (see note).
Actions a claimant or joint-claim couple could be required to take could vary vastly
from those they are able to take either because of what options are available to them
locally or their own circumstances.
Note:
This will be of particular significance for those making a sequence of hardship
applications where the claimant can be required to take steps to investigate helping
themselves out of hardship.

L1086 What is considered reasonable

Examples of what may be considered reasonable include
1. asking their immediate families for assistance but see L1090
2. access to free help to meet hygiene needs, for example: where the claimant
or member of the household has a medical condition
3. for those in work, asking their employer for an increase in hours
4. contacting local charities, support groups and other organisations that may be
able to help with immediate basic and essential needs, but see L1091,
5. the claimant serving notice in order to access savings or investments (see L1131).
This list is not exhaustive.

L1087 What is considered unreasonable

It is not considered reasonable to expect a claimant to
1. sell or pawn items they own (also see L1088) or
2. have to find cheaper housing (also see L1089) or
3. increase their debts by seeking credit (see L1116) or
4. rely on charities (see L1091).

L1088 Sell or pawn items « L1087

Claimants cannot be required to
1. sell
or
2. pawn
any items they, or their household, own in order to meet their basic and essential
needs, with the exception of stocks and shares. However, where a claimant or joint-
claim couple have taken this action of their own accord, any funds they have as a
result of the sale must be considered as being available towards meeting their basic
and essential needs.

L1089 Seeking other accommodation « L1062 « L1087

If a claimant is at risk of losing their home they cannot be required to
1. seek an alternative dwelling that would not house their current household or
2. put the family at risk or their friends or family in hardship or
3. find cheaper housing.
Note: Claimants cannot be required to access or increase credit as actions to
support themselves (also see L1116).

L1090 Help from family or friends « L1086

It will not be reasonable in every case for claimants or joint-claim couples to expect
assistance from close family or friends but it may be reasonable to expect some
claimants to consider the possibility of asking. What is or isn't reasonable will
depend on the individual's circumstances. For example it would not be reasonable
where families and friends have
1. their own difficulties or
2. the request may put strain on relationships or
3. the request may have a risk of violence (especially for estranged relations) or
4. the person is not in the proximity to offer assistance.

L1091 Investigate help from charities « L1078 « L1086 « L1087

Investigating what help may be available from charities will depend on what
1. is available locally and
2. steps claimants are prepared to take.

L1092

Claimants should not be expected to rely on support from charities. While claimants
may be prepared to request such help there should be no requirement to do so and
claimants should not be denied access to recoverable hardship payments if they
don't. For example; claimants are not expected to rely on food banks to meet their
food needs (also see L1078).

L1093

It will usually be reasonable to expect claimants to at least investigate and consider
what help may be available to them, but not force them to accept any help if they
choose not to.
L1094-

L1095

L1096 Effort to reduce non-essential costs

Claimants applying for hardship are expected to reduce expenditure that does not
relate to the four essential needs (1) (see L1061 et seq).

1 UC Regs, reg 116 (2)(c )

L1097 « L1098

It would be reasonable to expect a claimant to
1. cancel clubs and society memberships
2. serve contractual notice to cancel leisure services (see L1098) and
3. curtail entertainment activities.

L1098 « L1097

The notice at L1097 cannot require the claimant to incur financial penalties, for
example: cancelling a gym membership that carries a penalty for early cancellation.
However, this might include the claimant giving any contractual notice to cancel such
a contract to reduce their commitments for potential further periods of hardship they
might apply for.

L1099 Work search or preparation costs

It would not be reasonable to expect claimants to cease outlay they needed to make
to meet work search requirements, for example;
1. a mobile phone contract
2. broadband for internet
3. travel costs
as these are accepted as a means to search for work.

L1100 Children

It would be reasonable to expect a claimant to cease outlay on any non essential
expenditure relating to children as they would for themselves. However any
expenditure which is to maintain access to education would be deemed essential.

L1101

Expenditure on school activities will only be reasonable if it is vital to education or
safety although enquiries should be made for other sources of support as many local
authorities provide free school meals, uniform, dinners and access to after school
activities. For example:
1. sporting and after-school activities would be regarded as non essential but
there may be access to local authority support for free activities
2. school uniforms may be deemed essential but not in any areas where there is
a support scheme through the local authority to provide for free school uniforms
3. child care costs would depend on the reason they were incurred, for example
if they relate to a claimants work search and they are reasonable in the
circumstances, e.g. a parent had a job interview at 4pm and had to pay for a
babysitter for an hour to attend the interview may be considered reasonable if
no other family were available to help.
Note: A claimant must do what they can to access other sources of support. There
should be no blanket exemption of costs relating to children and no cap on what
level of financial expenditure is acceptable. It is for the DM to consider all the facts
and circumstances of the individual case in determining what can be considered
reasonable costs.

L1102 Medical costs

Where any medical costs are not covered by pass-ported free prescriptions
continuing costs to meet any household medical or well-being needs should not be
regarded as reducible expenditure. However, it would not be unreasonable for the
DM to seek a doctor or health care professional's verification of essential medical
costs.
Note:
See guidance at L1081 for guidance on hygiene costs.

L1103 Ineligible service charges for those in supported accommodation

When considering whether a claimant has done all they reasonably can to reduce
non-essential expenditure it would not be expected that a claimant reduce
expenditure on ineligible service charges, for example those claimants who live in
supported accommodation who have to pay ineligible service charges to avoid falling
into arrears.
Note: These charges are ineligible for UC housing.

L1104

- L1105

L1106 What the DM considers

DMs should, as far as is practical, ascertain
1. that the household has taken all reasonable steps to reduce household expenditure
2. whether there has been any irregular or large expenditure on non-essential items
3. the claimant has discussed alternative payment options with their creditor,
service provider, landlord or lender or supplier.

L1107 Available resources

The DM must consider whether the resources available to the claimant and their
household are sufficient to meet their basic and essential needs.

L1108

`Resources' is not defined in legislation. The word should be given its normal
everyday meaning (1) of the means available or a stock or supply that can be drawn
upon.

1 R(SB)19/82

L1109

When considering resources that may be available to the household this includes
resources that
1. are likely to be available to the claimant and their family and
2. that may be available from a member of the household who is not a member
of the family.

L1110

This includes any
1. income or
2. capital or
3. other money
available to the household.

Example

Lynn claims UC. She lives with her son Michael who is in F/T work. The DM decides
Lynn has failed to comply without good reason in a work preparation requirement as
required and imposes a sanction. She makes an application for hardship.
Lynn has no form of income but Michael contributes £50 a week towards household
expenses. The DM considers the £50 from Michael when looking at available
resources.

L1111

The DM should consider any resources that are available to the household including
1. earned and unearned income at the households disposal,
1.1 when they will receive it and
1.2 what is the gap between this and any potential recoverable hardship payment
2. capital or other money that can be
2.1
accessed immediately or
2.2
with notice and
3. what has any un-sanctioned UC received been spent on.
Note: When a sanction applies, the total UC award is not removed, it is reduced by
an amount equal to the claimants standard allowance (although for some claimants,
without additional elements of UC in payment, this may mean their award is reduced
to zero or nearly zero).

L1112

L1113 Common Financial Statement

If the claimant has a Common Financial Statement this could be evidence to validate
a claimant's expenditure. A DM cannot insist that a claimant has such a statement
but where a claimant has one it might help in assessing existing expenditure to
calculate any expected reductions.
Note: A Common Financial Statement is a statement used by major banks, financial
institutions and charities to assess an individuals debt levels against the income
threshold they need to meet those commitments when they have difficulty making
repayments.

[L1114-L1115]

L1116 Credit facilities « L1087 « L1089

Because credit facilities are liabilities rather than resources the claimant cannot be
required or expected to
1. apply for credit facilities from banks, building societies and mutual/friendly
organisations, pay-day advance firms and other financial institutions or
2. use or extend any existing credit facilities they may have, for example: a credit
card, loan or pay-day advance.

L1117

Credit facilities include
1. credit cards
2. overdraft facilities
3. loans
and
4. arrangements with retailers.

L1118

Money obtained from credit facilities should be considered as a resource if it is
actually possessed by the claimant or a member of the family at the point of
application.

Example 1

Andrew has applied for a recoverable hardship payment. He has a credit card with a
credit limit of £1500. £900 of the limit is available to Andrew.
When considering the amount of Andrew's resources the DM does not take account
of the £900 available on the credit card.

Example 2

Hazel has applied for a recoverable hardship payment. She states she has £200
which she got from her bank overdraft facility. Another £300 is available before she
reaches her overdraft limit.
The DM decides that the £200 that Hazel possesses should be considered as part of
her resources. The remaining £300 of her overdraft limit is not treated as resources.

L1119

The DM should consider the amount by which the family's resources are less than
the amount of hardship that would be paid.

[L1120]

L1121 Universal Credit and other benefits as resources

When deciding whether the claimant is in hardship the DM should take into account
any UC paid for the Assessment Period immediately prior to the application. That is,
the amount remaining after a reduction for a sanction has been applied.

L1122

Any income and capital that is disregarded in the calculation of UC is taken into
account when assessing the level of resources available to the claimant or joint-
claim couple.
Note: Taking into account any sums that are disregarded aims to arrive at a fair
assessment of what funds the claimant or joint-claim couple have at their disposal to
arrive at a determination that they are in hardship (1).

1 UC Regs, reg 116(2)(a)

L1123

This could include other benefits, but excluding CHB (see L1124), the
1. claimant
2. joint-claim couple
or
3.
member of the household
are receiving. This may include contribution-based benefits such as JSA(C ) or
ESA(C ) that can be paid at the same time as UC

L1124 Child Benefit « L1123

Payments of CHB should be disregarded from being a resource the claimant can be
expected to rely on to go towards meeting their household's basic and essential
needs.

[L1125]

L1126 Periodic payments of income

Where claimants or members of their family receive periodic payments of earned or
unearned income, the DM should work out the monthly amount the claimant, joint-
claim couple or member of their household will receive. This is to determine the
amount of resources available to the claimant and whether that is sufficient to meet
their basic and essential needs. This should already have been undertaken as part
of calculating the claimant's UC award.1
1 UC Regs, reg 65 - 74

Example

Des and Mary have two children and receive insurance payments of £134.80 every
four weeks on a Friday.
Des has been sanctioned for 91 days. He makes an application for a recoverable
hardship payment. He has just received a payment of £134.80 insurance payment.
Apart from that he has no other money or savings.
The DM calculates that the claimant's resources are £33.70 per week.

L1127 Are resources available immediately

When deciding whether the claimant is in hardship, the DM should consider whether
resources are available immediately. If they are, and are sufficient to meet the
claimant's immediate needs then hardship will not apply. The claimant will need to
re-apply when these funds are exhausted.

L1128 Income not available immediately

The hardship application tests whether a claimant is in immediate risk of not being
able to meet their basic needs. Where a claimant has an income that is not yet due
to be paid this should only be taken into account for a potential subsequent
application.

Example

Simon claims UC because he has recently lost his job. The DM decides Simon
should be sanctioned because he left his job voluntarily without good reason. It is
Simon's first failure at the higher level and a 91 day sanction applies.
Simon makes an application for a recoverable hardship payment. He has no other
money but states he expects to receive a first payment from a personal pension in 4
weeks. The DM confirms that the pension company will take four weeks to process
Simon's application to withdraw.
The DM determines that Simon will be in hardship until his first pension payment is
received.

L1129 Capital not available immediately

The claimant may have assets or savings that
1. cannot be cashed without giving a notice period or
2. would have to be sold to become available.
Examples of this include
· some Building Society accounts
· premium bonds
· stocks and shares
· unit trusts.

L1130

The DM should calculate the length of any delay before the asset or investment can
be converted to cash. The claimant, joint-claim couple or household may suffer
hardship in the period before the money becomes available.

L1131 « L1086

When calculating the length of the delay the DM should consider
1. periods of notice set out by the investment company or
2. delays that may occur between any sale and receipt of money.
Note:
The DM should assess whether the claimant has sufficient resource to meet
their basic and essential needs. If they have sufficient resource to meet their
immediate needs they cannot be in hardship until that resource is exhausted.

L1132

It would not be reasonable to expect a claimant to give notice to acquire an asset
which will not materialise until after the reduction period has expired. However the
claimant will need to demonstrate they are unable to access such a resource before
the end of the reduction period.
Note 1: This will need to be reviewed each time the claimant applies for a
recoverable hardship payment since they may incur additional sanctions that extend
the total outstanding reduction period thus making it reasonable to serve notice.
Claimants are not required to sell items or property.
Note
2: For detailed guidance on sanctions and reduction periods see ADM
Chapters K1 and K8.

L1133 Fixed period investments

The DM should bear in mind some types of fixed period investments can be cashed
early at the discretion of the investment company. If the claimant states that a fixed
period investment is held the DM should be satisfied that it cannot be cashed-in
before the maturity date.

[L1134-L1135]

L1136 Has the claimant taken reasonable steps to cash assets

Where the claimant or joint-claim couple cannot access their resources immediately
the DM should bear in mind that the claimant or joint-claim couple are required to
take steps to help themselves meet or partially meet their basic and essential
needs (1).
Note: This means that while an initial hardship application might be granted, a
subsequent application might fail if the claimant did not take prompt action to give
the required notice to release available resources.

1 UC Regs, reg 116 (2)(b)

L1137

The DM should determine if the claimant or joint-claim couple has taken reasonable
steps to cash any assets or investments when considering the resources that are
likely to be available to the claimant or joint-claim couple. This includes taking
prompt action to contact the financial institution.

Example 1

Jess lives alone and has no income. She has savings in an instant access building
society account of £250.
Jess' UC is sanctioned for failing without good reason to apply for a particular job.
Jess makes an application for a recoverable hardship payment.
The DM determines that Jess' available savings mean she can meet her immediate
needs and is not in hardship.

Example 2

Tommy lives alone and has no income. He has £1,000 in premium bonds but no
other savings.
Tommy's UC is sanctioned for 182 days for a second failure without good reason to
apply for a job vacancy. Tommy has no other form of income and applies for a
recoverable hardship payment.
The DM determines that because Tommy's premium bonds cannot be cashed for
three months he cannot meet his immediate basic needs.
However, Tommy is told that he will need to serve notice on his Premium Bonds to
help himself meet his future essential needs.

Example 3

Jordan lives alone and has no income. She has a unit trust investment plan valued
at £2,000 but no other savings.
She is sanctioned because she left her job without good reason. As this failure
occurred within 52 weeks of a previous higher level sanction, the sanction runs for
182 days.
Jordan requests a recoverable hardship payment. The terms of her investment plan
allow Jordan to cash her investment at any time. This has to be done by writing to
the plan manager.
The plan manager will then forward a cheque within five working days of receiving
Jordan's request.
The DM determines that Jordan's capital would not prevent her being in hardship
until the cheque from her plan manager has cleared into her bank account. The DM
estimates that this will take ten days, allowing time for postage and the cheque to be
processed. She will receive a recoverable hardship payment for that assessment
period.

L1138 Accounts with penalties for early withdrawal

Claimants may have savings in accounts that impose penalties for early withdrawal.
These resources will still be available to the claimant and should be considered
when deciding if the claimant is in hardship.

Example

Joanne has £2,500 in a 90 day notice account with a building society.
Under the terms of the account she must give 90 days notice of her intention to
make a withdrawal. If she does not do this the building society will let her have her
money straight away but will deduct 90 days interest from the amount withdrawn.
The DM decides that Joanne could withdraw the £2,500 less 90 days interest
immediately to meet her needs. She is not in hardship.

L1139 Comparing resources with the amount of hardship

The DM should calculate the maximum amount of the recoverable hardship payment
that is payable before determining if the claimant or joint-claim couples resources
are adequate. See L1151 for guidance on calculating applicable amounts in hardship
cases.

L1140

The claimant is less likely to be in hardship, and able to meet their immediate needs,
if their financial resources are equal to or more than the amount of hardship that can
be paid (although consideration should be made of whether those resources are
already accounted for). In these cases the claimant will need to re-apply when their
resources are depleted.
Period and amount of hardship

L1141 Period of hardship

When the DM agrees a claimant or joint- claim couple is in hardship, hardship is
paid for the number of days from and including the start date to and including the
end date.

L1142 Start date

The period starts from the date from which all the conditions of hardship are met (1)
(see L1016 and L1017).
1 UC Regs reg 117 (a) (i)

L1143 End date

Subject to the provision in L1144, the period of hardship ends on and includes the
earliest of the day prior to the date the claimant or joint-claim couple's next full
payment of UC
1. is due to be received or
2. would have been paid had it not been reduced by the sanction (1).
Note: `Full payment' means their regular monthly UC pay date not the date when
any advance payments are made. This full payment may have been reduced by a
sanction and maybe zero - it is still a full payment for these purposes.

1 UC Regs, reg 117 (a)(ii)

L1144 « L1143 « L1145

If this period is 7 days or less, the application will be treated as valid to the earlier of
the date
1. the following full payment of UC is due to be received or
2. that a sanction reduction comes to an end (1).

1 UC Regs, reg 117(b)

L1145

The period in L1144 refers to the next assessment period to that in which the
application for hardship is made which is a maximum of 38 days. In these
circumstances, hardship can be paid for that following assessment period as long as
the DM is satisfied that the claimant will still be in hardship in that next assessment
period, i.e. their next UC payment will be reduced as a result of the sanction and
their circumstances are not expected to change.
Note: Where the start date of the hardship period is later than the application date,
for example because the criteria have not been met, see the guidance at L1147.

L1146 Payment-due dates

UC payments are normally made within seven days after the end of an assessment
period on a working day. Payments due at weekends or on public holidays are
brought forward to the preceding working day. A period of hardship will end on the
day before this, so a claimant can re-apply for hardship on their next relevant
payment-due date.

Example 1

Liam's assessment period runs from the 3rd of each month to the 2nd of the following
month. He is in the all-work related requirement conditionality group.
The DM imposes a 91 day sanction and the total outstanding reduction period runs
from 3.5.13 to 1.8.13.
Liam receives his first reduced payment on Friday 7.6.13 (as 7 days after 2.6.13 is a
Sunday). He successfully applies for hardship on this day as he has insufficient
resources to feed his child, has no access to other help and no other non-essential
expenditure. As soon as he was notified of the sanction he undertook the work
search his Claimant Commitment requires and has continued to meet his
subsequent work search & preparation requirements.
His next UC payment is due Tuesday 9.7.13.
Liam's hardship period starts Friday 7.6.13 and ends Monday 8.7.13
The number of days are 32. The earliest Liam can make the next application for
hardship is Tuesday 9.7.13.

Example 2

Tanya receives a 14 days sanction on the UC payment for the assessment period
from 5.8.13 to 18.8.13. She applies for hardship on Monday 16.9.13 so that she can
buy food, having spent the UC she received on rent.
She attended an interview with her adviser on 25.8.13 at which she presented her
updated CV and has complied with her other work search requirements. Tanya's
next UC payment is due Friday 11.10.13.
Tanya's hardship period starts Monday 16.9.13 and ends Thursday 10.10.13. The
number of days are 25. The earliest Tanya can make her next application for
hardship is not applicable as her next payment of UC is not subject to sanction.
L1147 - L1150

L1151 The amount of recoverable hardship payments « L1139 « L1156

The daily amount of hardship is calculated on the basis of the amount by which the
sanction reduces the claimant's award in the assessment period. This is averaged to
a daily amount as follows (1)
60% of total reduction in Assessment Period ×12
365
where the assessment period is that immediately prior to that in which they make
their hardship application, i.e. the period covered by the sanction.
The result is multiplied by the number of days in the hardship period to give the sum
payable to the claimant or joint claim couple.
Note: Where the calculation of an amount results in a fraction of a penny, that
fraction is to be disregarded if it is less than half a penny and otherwise it is to be
treated as a penny (2) ( i.e. the rounding rule) except in the calculation of the daily rate
for a reduction.
1 UC Regs, reg 118; 2 reg 6(1); 3 reg 6(2)
Example:
Liam's standard allowance is reduced by £10.20 for each day in the assessment
period 3.4.13 to 2.5.13. This is 30 days giving a total of £306.00
His application for hardship on 9.5.13 means he receives
60
£306 × 12 %
= £6.04 per day
365 29 days at £6.04 perday = £175 .16 total
29 is the number of days in the hardship period, until 06.06.12 - the day before next
UC payment is due to be received.

Example 2

Tanya's award is reduced by £142.80 for the 14 days she is sanctioned in the
assessment period 5.8.13 to 4.9.13.
Her application for hardship on 16.9.13 means she receives
£142.80 ×12 60%
=£2.82 per day
365
25days at £2.82. per day = £70.50total
Had Tanya applied for hardship on 11.9.13 (as soon as she received a sanctioned
payment) she could have received £84.30 (i.e. 60% of (£142.80 x 12)/365 X 30
days) assuming she met all the other conditions for hardship at the time. However,
when deciding whether Tanya in hardship the DM will need to take into account she
received a 14 day sanction so will still have been paid over half of her standard
allowance.

[L1153-L1155]

L1156 Frequency of payments

The amount of hardship calculated following the formula at L1151 is paid to the
claimant once the DM accepts the claimant or joint-claim couple have met all the
conditions for hardship and are unable to meet their basic and essential needs.
Claimants who receive payments more frequently than once a month can receive
the payment in instalments to help with their budgeting needs but the period will still
be calculated as the number of days until the day before their normal UC payday.

[L1157-L1160]

L1161 Recovery of hardship

When recoverable hardship payments cease and sanctions no longer apply to the
claim, the total amount paid to the claimant or joint-claim couple is recoverable.
1 UC Regs, reg 119 ; 2 RUC Regs, reg 108
Note: For full guidance on the recovery of hardship payments see the Debt
Management Guide).
Claimant starts work

L1162 Recovery is suspended

As an incentive to claimants to move into work, recovery of hardship payments will
be suspended where the claimant, and each joint-claimant, fall out of labour market
conditionality because their individual or combined earnings take them above their
earnings threshold (1). In these cases recovery is suspended from the start of the
assessment period in which the conditionality no longer applies.
Note: For detailed guidance on earnings thresholds see ADM Chapter J3 (Work
related requirements).
1 UC Regs, reg 119(2)

L1163 Balance written-off

Where the earnings of
1. single claimant's or
2. the combined joint claimants'
mean they have been out of labour market conditionality for a single period of, or
periods that total, at least 26 weeks, any remaining un-recovered balance of
hardship is written-off (1).
1 UC Regs, reg 119 (3)