Dear constituent,
Thank you for contacting me about the Trussell Trust’s Social Security Campaign.
I understand constituents’ concerns regarding rising costs, and I know that ministerial colleagues are determined to help people with the cost of living.
I appreciate the difficulties which many people will be experiencing as a result of increased inflation, Putin’s barbarous attack on Ukraine and increased energy prices. The Government has taken unprecedented action in a number of respects to ensure that support is being provided to people to help with increased costs for families and provide support for children. Some of the payments announced by the Government have already been made, some will be made in the coming weeks and others will be made later this year. These measures were designed to provide support over the next few months and recently, as an additional measure, the Government introduced the Energy Price Guarantee, which will see a typical household save an average of £1,000 a year on their energy bills, and to provide certainty, be in place for two years.
Not all of the measures announced to date will apply in every circumstance and there will be elements which will apply to some but not all people, depending on their circumstances but I nevertheless wanted to set out the support which is being made available already and which was announced recently.
The Government has announced a £37 billion package of support to assist people with the cost of living - https://www.gov.uk/cost-of-living which includes a non-repayable £150 cash rebate which is being/has been provided for people living in homes in Council Tax bands A-D, equivalent to 80 per cent of all households.
There will also be a £400 energy discount. This means that most families will receive £550 with lower income families receiving more help, including an additional £650 one-off cost of living payment for those on means tested benefits such as Universal Credit, job seekers allowance and pension credit. The first instalment of half this sum has already been made.
In addition, there will be:
• A £300 one-off pensioner cost of living payment for pensioners in receipt of the Winter Fuel Allowance.
• A £150 one-off disability cost of living payment for people in receipt of disability benefits, which will start to be paid this month.
Full details of the support available are set out in the above link and in relation to Universal Credit and the issues raised in your email, you will see that the above measures will ensure that many low income households will receive £1,200 or more in response to the increased cost of living and the additional support as a result of the Energy Price Guarantee - Government announces Energy Price Guarantee for families and businesses while urgently taking action to reform broken energy market - GOV.UK (www.gov.uk)
In addition to the above support, there has been an extension of eligibility of the Warm Homes Discount and an increase of the payment to £150, reforms to National Insurance which will see the overwhelming majority of taxpayers paying an average of £330 less since July, a 3.1% increase in the state pension and the retention of other pensioner benefits, the doubling of the Household Support Fund to £1.5 billion to help people on lower incomes, a 5p per litre fuel duty cut having frozen fuel duty in each of the last twelve years, a tax cut for businesses by raising the Employment Allowance as well as measures previously confirmed to increase the amount of Universal Credit by reducing the taper rate which represents a tax cut of £1,000 per annum for more than two million families with low incomes and, finally, a 6.6% increase to the national living wage for those on lower incomes.
Further, in addition to the above steps, I welcome the Government’s commitment to reducing child poverty and supporting low-income families, and I believe work is the best route out of poverty. With a record 1.3 million vacancies and unemployment at 3.8 per cent across the UK, focus is firmly on supporting people to move into and progress in work. This approach is based on clear evidence about the importance of parental employment - particularly where it is full-time – in substantially reducing the risks of child poverty and in improving long-term outcomes for families and children.
The multi-billion-pound Plan for Jobs has protected, supported and created jobs across the country. This includes our Way to Work campaign which it is estimated has seen at least 485,000 unemployed Universal Credit claimants move into work - New jobs mission to get 500,000 into work - GOV.UK (www.gov.uk)
Finally, I am committed to supporting those on low incomes and this country has a robust social security system to do so. Over £242 billion will be spent through the welfare system in Great Britain in 2022/23 including £108 billion on people of working age and over £134 billion on pensioners.
The Secretary of State for Work and Pensions is required to undertake an annual statutory review of benefits and pensions. They are required to up-rate some benefits and pensions by at least the increase in earnings or prices. Other benefits, mainly those of working age, are subject to their discretion. In 2022/23 benefits and pensions were increased by the Consumer Prices Index (CPI) of 3.1 per cent.
The review uses the CPI in the year to September to measure inflation, and average weekly earnings for the period May to July to measure earnings. The annual review will commence in the autumn and her decisions will be announced to Parliament in November in the normal way.
Debt deductions for Universal Credit overpayments are part of the DWP’s obligation to protect public funds and to ensure that, wherever possible, benefit overpayments are recovered. I know that Ministers want to discharge this duty without causing undue financial hardship. That is why the Government has an established route by which anyone experiencing difficulties with repayments is encouraged to contact DWP Debt Management in order to negotiate a possible reduction in their rate of repayment, or a temporary suspension of repayment, depending on financial circumstances.
The Department has to balance the amount that can be deducted with the protections that deductions offer claimants. Lowering the maximum deduction rate further would result in less essential deductions such as Child Maintenance being made. The Government has reduced the maximum deduction rate twice in the past three years – from 40 per cent to 30 per cent in 2019, and further to 25 per cent in 2021. Ministers believe this strikes the right balance of ensuring priority debts and social obligations are met whilst enabling claimants to retain more of their award to meet day-to-day needs.
Thank you again for taking the time to contact me.
Sincerely,
