Source · Select Committees · Work and Pensions Committee
Recommendation 5
5
Rejected
Paragraph: 24
While an annual uprating is workable and effective at times of stable inflation, it is...
Recommendation
While an annual uprating is workable and effective at times of stable inflation, it is not appropriate in more volatile economic circumstances and is causing people real hardship. In the medium-term the Department should reduce the length of time between the inflation reference period and the uprating implementation date to allow more flexibility in the system, preferably to the previous quarter end or more recent if possible.
Government Response Summary
The government will not reduce the length of time between the inflation reference period and the uprating implementation date because it is using one-off payments instead and there are IT limitations. They will continue using a consistent period for up-rating as it evens out peaks and troughs over time.
Paragraph Reference:
24
Government Response
Rejected
HM Government
Rejected
The temporary uplift in Universal Credit (UC) was intended to support those most affected financially by the impact of the Covid-19 pandemic when being newly unemployed. The cost-of-living situation now is different and affects everyone. One-off payments are the quickest way to deliver support to over 8 million customers in receipt of income related benefits and 6 million customers receiving disability benefits before the next benefit up- rating in April 2023. Over 8 million pensioner households will also receive a pensioner cost of living payment alongside their winter fuel payment this coming winter. The Secretary of State commences her statutory annual review of benefits and State Pensions in the autumn using the most recent prices and earnings indices available. DWP IT systems other than UC, have a deadline of the last weekend in November to allow for all the required processes to take place to ensure the new payment rates come into force from the following April. Given working-age legacy benefits are closing and those legacy claimants will be moved to UC by 2024, we will not be making any IT changes. There are no plans to change the up-rating period: using a consistent period for up-rating, for example, the 12 months to September to measure inflation means any peaks and troughs even out over time. For example, in 2012 benefits were increased by 5.2%; whereas by the following April CPI was 3% and in 2020 the increase was 1.7%; while CPI fell to 0.8% by April.