Source · Select Committees · Treasury Committee
Eighth Report - Autumn Statement 2022 – Cost of living payments
Treasury Committee
HC 740
Published 14 December 2022
Recommendations
3
Accepted in Part
Para 23
We recommend that the Government consider a greater number of lump-sum payments than the two...
Recommendation
We recommend that the Government consider a greater number of lump-sum payments than the two in 2022–23, which would better ensure that more households have support at the time of their greatest need, and would reduce the severity of the …
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Government Response Summary
The government rejected the recommendation to mirror the Energy Bill Support Scheme. The government will deliver the £900 Cost of Living Payment for means-tested benefit claimants in three payments over the course of the financial year (Spring 2023, Autumn 2023 and Spring 2024).
HM Treasury
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Conclusions (3)
2
Conclusion
Not Addressed
Para 22
The Government provision of additional support to those on low incomes through one-off payments presents a problem of cliff-edges to that support. If someone doesn’t match the criteria required of the means-tested benefits, both in terms of income and the time they are being assessed for eligibility, they will not …
Government Response Summary
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 (Spring 2023, Autumn 2023 and Spring 2024).
4
Conclusion
Not Addressed
Para 24
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.
5
Conclusion
Acknowledged
Cliff-edges remain present elsewhere. Certain income levels also attract unusually high marginal tax rates or the loss of means-tested entitlements. Such features are distortionary. The Treasury should endeavour to smooth them wherever possible, in areas of its own responsibility, and when considering funding requests from departments. We will return to …
Government Response Summary
The Government continues to consider marginal tax and deduction rates in policy to work to improve incentives in the system, ensuring that it always pays to work and that the greatest burden falls on those with the broadest shoulders, whilst protecting the most vulnerable in society.