What To Do If Your Benefits Stop, You Become Unemployed, or Are Sanctioned by the DWP

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A Survival Guide for Navigating Financial Crisis, Sanctions, and Unemployment in the UK

“YOU ARE NOT ALONE”

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When your benefits suddenly stop, you lose your job, or the Department for Work and Pensions (DWP) sanctions your claim, it can be a terrifying and overwhelming experience. Whether you’re disabled, a carer, self-employed, or simply in a vulnerable position, it’s crucial to know your rights, act quickly, and access emergency support to stay afloat. This guide walks you through the steps to take immediately and how to prepare for the future.

1. Stay Calm and Understand Why It Happened

Before panicking, take a moment to clarify the reason for the change:

• Check letters or messages from DWP via your Universal Credit journal, post, or email.
• Call or message your Work Coach or relevant DWP office to confirm the reason — be polite but firm.
• Common reasons include:
  • Missed appointments
  • Failure to complete job search activities
  • Reassessments for disability or health conditions
  • Reported changes in circumstances
  • Technical or administrative errors

2. Request a Mandatory Reconsideration (MR)

If you believe the decision is unfair:

• Request a Mandatory Reconsideration within one month of the decision.
• Log in to your Universal Credit account or send a written request explaining why the decision should be changed.
• Provide supporting evidence (medical letters, job search records, etc.).
• Ask for a backdated payment if your claim is later accepted.

3. Apply for a Hardship Payment (if sanctioned)

If you’ve been sanctioned and cannot meet basic needs:

• You may qualify for a Hardship Payment (a reduced rate of Universal Credit).
• Apply via your Universal Credit journal or ask your Work Coach.
• You must prove you’ve made efforts to find work or comply with your claimant commitments.

4. Explore Other Financial Support Options

If your benefits are stopped, you may still be eligible for emergency help:

Local Authority Emergency Support:

• Local Welfare Assistance Schemes (available through your council)
• Discretionary Housing Payments (if struggling with rent)
• Council Tax Reduction (if your income has dropped)

Charities and Grants:

• Turn2Us Grant Finder (https://grants-search.turn2us.org.uk)
• The Trussell Trust for food banks
• Citizens Advice for tailored support and referrals

Creditors and Financial Obligations:

If you are struggling to pay loans, credit cards, or other debts:

• Contact your creditors immediately and explain your financial situation.
• Request a temporary payment freeze or reduced payments — many lenders have hardship policies in place.
• Ask for a “period of grace” where:
  • Interest is frozen
  • Late payment fees are waived
  • No negative impact is made on your credit file (depending on the arrangement)
• Keep everything in writing or request written confirmation of any agreements.
• Consider contacting StepChange, National Debtline, or Christians Against Poverty for free debt advice and negotiation support.

5. Update Your Housing and Utility Providers

Do not wait for arrears to build:

• Inform your landlord, housing association, or mortgage provider right away.
• Contact utility companies (electricity, gas, broadband) and request:
  • Payment plans
  • Emergency credit (prepayment meters)
  • Fuel vouchers (via local councils or charities)

6. Register as Unemployed (If Applicable)

If you lost your job:

• Register as unemployed with DWP to re-establish Universal Credit or Jobseeker’s Allowance.
• Seek advice from Jobcentre Plus or Work and Health Programme providers.
• You can also access Restart Schemes or Careers Wales/England/Scotland support.

7. Know Your Rights

It’s crucial to be aware of:

• Appeal Rights: If the MR fails, you can appeal to a Tribunal.
• Disability Protections: The Equality Act 2010 protects against discrimination.
• Reasonable Adjustments: If you are disabled or mentally ill, the DWP must consider this.
• Safeguarding: If you are vulnerable, DWP must take additional care when managing your case.

8. Reach Out for Advocacy Support

You don’t have to face this alone:

• Citizens Advice Bureau
• Disability Rights UK
• Mind (for mental health-related claims)
• Your MP: You have the right to involve your Member of Parliament, especially if delays or unfairness persist.

9. Keep Records of Everything

Document everything:

• Save screenshots of your journal messages, letters, and phone call logs.
• Keep a diary of events, including how the stoppage affected you (especially if making a complaint or legal claim).

10. Plan for the Future

Once your immediate crisis is managed:

• Consider building a small emergency savings buffer, once you get on the straight and narrow for future disruptions.
• Look into self-employment grants, training courses, or local enterprise schemes if you’re trying to regain independence.
• Explore volunteering or online freelancing to gradually boost skills and income.
• Consider distance learning by signing up for Open University. Student Finance can help with maintenance loans.

Customisable Budget Form for Creditors & Covering Letter Download

We’ve designed a customisable budget form and covering letter to help you clearly present your financial situation to your creditors. Whether you’re dealing with loan companies, credit card providers, or utility firms, this form can support your request for a payment freeze, reduced payments, or a temporary breathing space.

Rather than spending money on costly postage or next-day signed-for delivery, we recommend emailing each creditor directly. Not only is this more affordable, but it also reduces your carbon footprint and ensures faster communication.

Simply download and fill in the form below, tailor it to your circumstances, and send it with a cover letter.

If you encounter any problems downloading, just drop us an email and we will send you the attachments.

Final Thoughts

Being sanctioned, losing your job, or having your benefits stopped can feel like your world is collapsing. But you’re not powerless. By taking swift, informed action and reaching out for the right support, you can navigate this storm and rebuild stability. Advocacy, awareness, and self-compassion are essential tools on this journey. You’re not alone — and help is out there.

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