Hug rated badly, but it's relative (8)
I believe the answer is:
daughter
'it's relative' is the definition.
(daughter is a kind of relative)
'hug rated badly' is the wordplay.
'badly' is an anagram indicator (letters in the wrong order).
'hug'+'rated'='hugrated'
'hugrated' is an anagram of 'DAUGHTER'.
'but' acts as a link.
(Other definitions for daughter that I've seen before include "Family member" , "Close relative" , "Dug earth (anag.)" , "Family relative" , "'''Don't put your ... on the stage, Mrs Worthington'' (Noel Coward) (8)'" .)