Cost-of-living payments not enough to meet scale of the problem, say MPs

Cost-of-living support payments have not been enough to meet the scale of the problem and offer only a short-term reprieve for many people, MPs are warning.

The cross-party Work and Pensions Committee called for the Government to consider widening the eligibility for future payments and to take more account of the financial difficulties faced by people with disabilities and families.

Its report said: “We are particularly concerned that the additional support offered to those with disabilities was only £150 per year and we recommend that this particular support be increased in proportion to the costs that people with disabilities incur.”

The recommendations follow an inquiry examining the package of support introduced to protect people claiming benefits from the effects of 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 said it acknowledges the important impact the payments have made and the speed of distribution.

Unsophisticated

But it said the unsophisticated nature of the payments system has placed significant limitations on how it has met the needs of different groups, such as families, older people and those with disabilities.

Any future cost-of-living support payments should 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 argued.

It also suggested that the Government consider uprating universal credit, instead of issuing payments.

The report said: “Given we have also heard that an uplift of the regular benefits received would be more beneficial for budgeting than ad-hoc cost-of-living support payments, the Government should consider uprating universal credit instead of issuing these payments.

“It should maintain the ad-hoc payment system for those on legacy benefits as these benefits cannot be so easily uprated.”

Guidance

Guidance to local authorities on the household support fund should also be clarified, to make clear the potential eligibility of some people with no recourse to public funds, who are currently missing out on help, the committee suggested. Details of the fund should be better communicated and advertised, and the application process should be made more accessible, it said.

The household support fund allows local authorities in England to make discretionary payments to people in need of help towards bills.

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, the committee said.

Sir Stephen Timms, chair of the Work and Pensions Committee, 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 everyday 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.”

Payment dates

If the Government decides to issue further cost-of-living payments in the next financial year, it should announce the payment dates, but not the qualifying period, in advance, the committee suggested.

It said this would improve the ability of households to budget, while still mitigating the risk of fraud and risks to incentives to work.

The report was released as the Joseph Rowntree Foundation (JRF) published research indicating that 17% of low income families have turned off their fridge or freezer at some point during the cost-of-living crisis, in response to rising prices.

Nearly half (46%) of this group said they turned off their fridge or freezer for the first time in the past six months, according to the research carried out by Savanta in October.

The JRF’s tracker is the fifth in a series of large-scale studies of over 4,000 households in the UK on low incomes (the bottom 40%).

Peter Matejic, chief analyst at the JRF said: “The picture isn’t getting better for low income families even as inflation starts to come down.”

A Department for Work and Pensions spokesperson said: “The cost-of-living payments have provided a significant financial boost to millions of households – just one part of the record £94 billion support package we have provided to help with the rising cost of bills.

“This includes a 10.1% rise to benefits earlier this year, and we’re investing £3.5 billion to help thousands into jobs – the best way to secure their financial security in the long-term.

“Ultimately, the best way we can help families is to reduce inflation, and we’re sticking to our plan to halve it this year, taking the long-term decisions that will secure the country’s financial future.”

Louise Rubin, head of policy at disability equality charity Scope, said: “We back the committee’s call that there needs to be more cost-of-living support for disabled people this winter.

“We’re hearing from disabled people who can’t afford to power vital equipment, face excruciating bills and don’t know which way to turn.”

Hayley Macnamara, Community Housing Cymru’s policy and external affairs manager overseeing cost of living, said: “People living in housing association homes continue to be among the hardest hit by the cost of living crisis and they need urgent financial support now.

“It is crucial that benefits are increased in line with inflation so that people on lower incomes, including many living in housing association homes, can afford the very basic living essentials.

“It’s also absolutely vital that there is a review and increase to Universal Credit, this will ensure people get the minimum level of support they need to prevent them from being  forced to make even more heart-breaking spending choices.

“We are calling on the UK and Welsh Governments to act now to ensure people living in housing association homes are not forgotten this winter. We would encourage anyone living in a housing association home in Wales to get in touch with their landlord if they are concerned about financial difficulties.”