Costs of Living Payments 2022 - vs - 2023

In case of NIL award, the 2022 guidance was:
“Universal Credit ‘nil awards’
You will not be eligible for the Cost of Living Payment if your Universal Credit is reduced to £0 for the qualifying assessment period. This is sometimes called a ‘nil award’. Reasons your Universal Credit may be reduced to £0 for an assessment period include getting more than one payment of earnings, your or your partner’s earnings go up, your or your partner’s savings go up, you start getting another benefit.

If money has also been taken off for other reasons (such as payments of rent to your landlord or for money that you owe), you might still be eligible”
(https://www.gov.uk/guidance/cost-of-living-payment-2022#low-income-benefits-and-tax-credits)

In 2023 the guidance was more or less the same but sanction related bits were added to the NIL award criteria:
-you got a ‘sanction’ because you did not do something you agreed in your claimant commitment
-you had a hardship payment because you got a sanction and could not pay for rent, heating, food or hygiene needs

My client would have been entitled to COL back in 2022 if the sanction bits were added, like they were in 2023.

Is it worth pursuing? And if yes, how? Complaint, MR?

Even under the 2023 guidance, if a sanction means you did not receive anything, you will not be entitled to the COL Payments. Only if you received a hardship payment would you be entitled.

Or are you saying your client was in receipt of a hardship payment?

Yes, he was. He would have been entitled to COL in 2022 if the 2023 rules were applied.