Call for increase in benefits rather than more cost-of-living payments

Increasing universal credit rates may be more effective in helping struggling households than further cost-of-living payments, according to the Work and Pensions Committee.

The Committee, whose aim is to examine the spending and policies of the Department for Work and Pensions, put forward this proposal in a report looking at the effectiveness of the cost-of-living payments made in 2022/23 and 2023/24 in supporting the vulnerable.

Problems with the cost-of-living payments

The report highlighted a number of concerns the Committee had with the cost-of-living payments in their current form including:

• the cliff-edge nature of the payments that means a person gets nothing if they earn just over the qualifying threshold
• those paid on a non-monthly basis being at particular risk of missing out on the payments
• not all low-income families having received the payments
• the payments not always meeting the needs of different groups such as families, older people and those with disabilities
• the additional £150 offered to those with disabilities being insufficient 
• the payments not always being sufficient to allow households to cover all their essential costs and sometimes only offering temporary respite from hardship
• the payments not taking account of family size so those with children receive the same amount as those without

Committee welcomed the swift payments

The Committee said the fact the payments were made automatically was a good thing, as it means cash has been issued quickly to those in need.

It also acknowledged that the payments have had a significant impact for some.

Better way to help

But it suggested increasing universal credit rates and only issuing cost-of-living payments to those on legacy benefits (that can’t be uprated as easily) may be more effective.