Source · Select Committees · Treasury Committee
Recommendation 4
4
Not Addressed
Paragraph: 24
We would also welcome analysis from the Treasury of: • the work disincentive effects of...
Conclusion
We would also welcome analysis from the Treasury of: • the work disincentive effects of different sizes and frequencies of lump sum payments, and • whether a taper might better incentivise work as part of any subsequent payments from 2024–25.
Government Response Summary
The government's response focuses on the timing of announcements to deter fraud and the limitations of the 'Ad Hoc Payment System', rather than addressing the request for analysis of work disincentive effects or the potential for a taper in future payments. It mentions work to develop a new approach to consumer protection in energy markets, but it is not related to the committee's request.
Paragraph Reference:
24
Government Response
Not Addressed
HM Government
Not Addressed
As set out, the Government’s approach to qualifying dates for each payment is to announce them when they have passed. The purpose of this is to deter fraud and to mitigate any risk to work incentives. Three means-tested Cost of Living Payments and a single Disability Cost of Living Payment balances spreading the support throughout the year and enabling sufficient time for delivery of each payment without compromising core benefit delivery. Adding in further payments could also delay ‘mop-up’ payments to some who have yet to have their entitlement established to receive a 2022 Cost of Living Payment. In addition, the ‘Ad Hoc Payment System’ which DWP uses to make Cost of Living Payments is limited in the number of activities it can manage concurrently. It can only make one payment ‘type’ at a time, of a single value. To build a service which includes a taper based on a customer’s earnings or other circumstances would be extremely complex and potentially costly, with similar rules to those within a benefit like Universal Credit and would not be possible in the time available. Work continues to develop a new approach to consumer protection in energy markets, which will apply from April 2024 onwards.