Recommendation 3

HM Government Accepted in Part

The Government did consider a greater number of lump-sum payments than the two in 2022-23 and announced on 3 January 2023 that the £900 Cost of Living Payment for means-tested benefit claimants will be delivered in three payments over the course of the financial year (in Spring 2023, Autumn 2023 and Spring 2024). This is to ensure claimants receive ongoing support throughout the financial year. The Government has prioritised making payments to customers on the lowest incomes as early as possible in 2023-24 after the Energy Price Guarantee changes and the Energy Bill Support Scheme ends. The other two payments will be made either side of the winter period. Spreading payments throughout the year may help to support budgeting. Each payment will have a different qualifying date, and this will increase the chance that those who flow onto the benefit system at some point in 2023-24 receive support. The Government does not accept the Committee’s recommendation to mirror Cost of Living Payments on the payments model used for the Energy Bill Support Scheme. Support through the Energy Bills Support Scheme is being delivered via energy suppliers to households in Great Britain with a domestic electricity connection. This support is being applied to household bills automatically in regular monthly instalments over the 6 months from October 2022 to March 2023. In contrast, Cost of Living Payments are made using DWP’s ‘Ad Hoc Payment System’. This sits outside the normal benefit delivery system and as a result, is limited in its nature – for example it can only make one payment ‘type’ at a time, and it requires specialist teams to make the payments. Further ‘mop-up’ payments for some of the qualifying benefits are also expected to be made, if an entitlement that would qualify for a payment is later established to have existed. It is not possible within the constraints of this system to make a payment each month for six months without compromising delivery of DWP’s core benefits. Therefore, the Government has concluded that three means-tested Cost of Living Payments and a single Disability Cost of Living Payment balances spreading the support throughout the year and enables sufficient time for delivery of each payment without compromising core benefit delivery. Adding further payments could delay ‘mop-up’ payments to some who have yet to have their entitlement established to receive a 2022 Cost of Living Payment.