Cost of living support payments welcome but insufficient to meet the scale of the problem, MPs say
14 November 2023
Support payments to help people cope with cost of living pressures have not been enough to meet the scale of the problem and offered only a short-term reprieve for many, MPs warn today, in a report that calls on the Government to consider widening the eligibility for future payments and for them to take account of the financial difficulties faced by disabled people and families.
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- Previous report: The Cost of living
- Inquiry: Cost of living support payments
- Work and Pensions Committee
The recommendations from the cross-party Work and Pensions Committee come after an inquiry examining the package of support introduced to protect people claiming benefits from the effects of recent rising energy prices and inflation.
After receiving nearly 2,000 survey responses from those with first-hand experience of cost of living payments, the Committee acknowledges the important impact the payments have made and the speed of distribution. The report concludes however that they have not reached all low-income households and therefore calls on the Government to consider adding housing benefit as a qualifying benefit for future cost of living support payments.
The Committee also found that the unsophisticated nature of the payments system has placed significant limitations on how the system has met the needs of different groups such as families, older people and those with disabilities. Any future cost of living support payments should therefore take account of family size, while financial support for those with disabilities should be increased in proportion to the additional costs that they incur, the report says.
Other recommendations include that the Government should consider uprating Universal Credit instead of issuing payments and that guidance to local authorities on the Household Support Fund should be clarified to make clear the potential eligibility of some people with no recourse to public funds, who are currently missing out on help.
Work and Pensions Committee chair, Rt Hon Sir Stephen Timms MP, said:
“While the support payments have made an important impact in helping those most in need during these difficult times, the overall package has offered just a short-term reprieve for many, while others have slipped through the safety net altogether.
“Families with children need support over and above the flat rate on offer while the extra £150 a year paid to those with disabilities, who incur unavoidable extra expenses, barely touches the sides. There are also low-income households receiving only housing benefit currently deemed ineligible for the extra help, while some eligible people with no recourse to public funds are being denied access to the Household Support Fund because of unclear guidance to councils.
“It is vital that the Government listens to those with every day experience of support payments so it learns important lessons should a new package of support be required in the future. Ministers should get ahead of the game by bringing forward their evaluation of the measures and at the same time give serious thought to changes to the wider benefit system that would make ad-hoc payments less necessary.”
Conclusions and recommendations
Access to the cost of living support payments
- The Committee welcomes the automated nature of the payment system but is concerned about the cliff edge nature of the payments, which creates a fundamentally unfair income gap where a person is financially penalised for earning just over the qualifying threshold.
- Support payments do not currently reach all low-income households receiving benefits. The Government should consider add Housing Benefit as a qualifying benefit for future cost of living support payments and set out the practicalities of doing so.
- The Government should clarify in its guidance when local authorities can use the Household Support Fund to assist people with no recourse to public funds. The Committee is concerned that some eligible people with NRPF could be missing out due to lack of clarity.
- If cost of living payments continue in the next financial year, the Household Support Fund should be maintained for those ineligible for those payments and other means tested benefits. Details of the fund should also be better communicated and advertised. The application process should also be made more accessible.
The impact of the cost of living support payments
- The Government should bring forward its evaluation of the cost of living support payments so analysis can be considered ahead of decisions on possible payments next financial year.
- Future of cost of living support payments should take account of family size. Currently there is no specific support for families and children.
- The Government should devise a policy to address the unfairness of low-income pensioner households who just miss out on Pension Credit being significantly worse off than those who receive it and its passported benefits, including cost of living payments.
- The cost of living payments do not provide a suitable level of support for groups who face additional costs during a cost of living crisis, such as people with disabilities. Should there be future payments, the Government should increase the support to those with disabilities in proportion to the additional costs that they face.
- An uplift of regular working age benefits received would be more beneficial than ad-hoc cost of living support payments as it would better enable households to budget and reduce the chance of a recipient losing out on a major one-off payment. The Government should clarify the legal position of whether it can uprate Universal Credit while maintaining the one-off payment system for those on legacy benefits. If it is possible, it should do so for any future support.
- If the Government decides to issue further cost of living payments in the next financial year, they should announce the payment dates (but not the qualifying period) in advance. This would improve the ability of households to budget whilst still mitigating the risk of fraud and risks to work incentives.