Lynne
You cannot be penalised for opting for a Paper hearing.
Be aware that you will need to stick to the timescales for providing additional testimony and evidence for the hearing, so the Tribunal Service will need to have anything that you want the panel to consider no later than one month from the date on the letter that will accompany the DWP's submission that you will receive a copy of.
Gordon
Nothing on this board constitutes legal advice - always consult a professional about specific problems