Universal credit claimants should be compensated if their benefits are paid late or promised training and skills courses are not delivered, a conservative thinktank has recommended.

Bright Blue said it was unfair that claimants were sanctioned – had their benefits docked – if they failed to look for work or missed appointments, but jobcentre officials faced no penalty if their errors left claimants in hardship.

It also called for financial rewards for claimants who put “maximum effort” into their job search but were unable to find work. This could be a cash supplement built into benefits and a biannual £1,000 cash prize.

All new universal credit claimants should receive a one-off upfront “helping hand” payment amounting to a quarter of the estimated first month’s benefit to help with the five-week minimum waiting time for the first payment.

The thinktank said the long waiting time for initial payments was “difficult and distressing” for most claimants, and making non-repayable financial support available would soften the impact and generate goodwill.

The recommendations came in a report on how claimants’ experience of universal credit could be improved. Bright Blue said it was broadly supportive of the online benefit system and said its research showed most people were adapting.

But it said older claimants and those with mental and physical health problems often struggled with universal credit – particularly with the initial 35-day wait for payment – and its complexity and harshness was dissipating public confidence.

The most eye-catching recommendation was a call for victims of error or maladministration by the Department for Work and Pensions (DWP) to be given the right to appeal to an independent case examiner, who could award compensation equal to the sanctions levied on claimants judged to have breached rules.

Compensation payments could reach hundreds or even thousands of pounds, which the report suggested was essential if the system was to be seen as fair. “Ensuring there is equal treatment of all actors in the universal credit system is important for sustaining public and specifically claimants’ support for it,” the report said.

Claimants interviewed for the report revealed widespread cynicism about the intentions of universal credit, with many believing it had been made deliberately complicated to discourage people from claiming. “They are making it hard on purpose just to save money,” said one interviewee.

The report called for a universal credit smartphone app to help claimants who do not have access to computers or tablets, and for a full-time disability and mental health adviser in every jobcentre.

Ryan Shorthouse, the director of Bright Blue and a co-author of the report, said: “Despite welcome improvements made by the government in recent years, there are too many examples and too much evidence of significant hardship experienced by a sizeable minority of those on universal credit.”

Heidi Allen, the MP for South Cambridgeshire, who recently quit the Conservative party to become an independent, was on the report’s expert steering group. She called on ministers to restore funding for universal credit and make the five-week wait more manageable.

She said: “Whether it is reducing that wait time or converting advance payments to non-repayable grants for those with no financial resilience, the government must find a way to restore the welfare state’s core aim. It should be a helping hand up, not a net that drags the most vulnerable in society down.”

A DWP spokesperson said universal credit was a force for good and it would continue to make improvements. “We welcome the report’s finding that the majority of people have had a smooth move on to universal credit, appreciating the simple monthly payment and work coach support.”

Last month Citizen’s Advice reported that the five-week wait for a first benefit payment left nearly half of the claimants it advised unable to pay household bills or forced them to go without basics such as food or heating, while 54% had to borrow cash from family and friends to stay afloat.