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What if the claimant is sanctioned?

A sanction reduces the whole UC award by an amount equal to the appropriate Standard Allowance.

Where there is a Managed Payment in place there may not be enough left in the UC award to pay the full Managed Payment to the landlord ( same principle as with fluctuating earnings, see above).

If there is a Third Party Deduction for Rent Arrears being taken as well as a Managed Payment, this takes priority, so a landlord may find that an amount towards the arrears has been paid but arrears continue to accrue if their Managed Payment does not arrive (or is not paid to the full Housing Cost Element) and the tenant fails to pay the remaining rent.

 

Example:
Florence's maximum UC award is made up of a Standard Allowance  £317.82 plus Housing Cost Element £336.40 = £654.22.
As she is heavily in arrears the DWP have agreed to her landlord's request for managed payments - and for a Third Party Deduction which is taken at the maximum rate of an amount equal to 20% of her Standard Allowance ie £63.56 per month. The managed payment of £336.40 is paid directly to her landlord leaving Florence with £264.26 per month for food and bills.
Unfortunately due to failure to take up a job offer Florence has been sanctioned to the tune of £317.82 per month (ie an amount equal to the Standard Allowance). This leaves only £336.40 Universal Credit to cover Florence's expenditure, the managed payment, and the Third Party Deduction. The Third Party Deduction should reduce to the 10% rate ie £31.78 but to protect her tenancy the Third Party Deduction is taken first meaning £336.40 - £31.78 = £304.62, left for the managed payment (and for Florence). The £304.62 is paid to the landlord meaning Florence somehow has to make up the rental shortfall of £31.78 and pay for her food and bills out of nothing (or any other income she might have). She will have to find a job, or go to a food bank, or try for a hardship payment.







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