Source · Select Committees · Work and Pensions Committee
Recommendation 9
9
Paragraph: 52
At present, the Government plans to mitigate the impact of the five week wait on...
Conclusion
At present, the Government plans to mitigate the impact of the five week wait on this group of claimants by offering two week run-on payments of some, but not all, of the legacy benefits they are currently receiving. That is a sticking plaster, which costs public money, leaves claimants with a gap between payments, and unnecessarily disrupts their budgeting schedules. The delays to the pilot of managed migration give DWP the opportunity to develop something better.
Paragraph Reference:
52
Government Response
Acknowledged
HM Government
Acknowledged
recognising the likely increase in the numbers of claimants over this winter. We also recommend that the deduction cap should be reduced further, to 10%, in recognition of the fact that deductions are taken from an income already set at subsistence levels. If this acceleration involves deprioritising other planned changes or developments in the build programme, the Department should set out what these are and provide a revised timescale for their introduction. As mentioned above, in October 2019 the standard deduction cap was lowered from 40% to 30%. To further support claimants to effectively manage their finances, the Chancellor of the Exchequer announced in the March Budget 2020 that we will be lowering the standard deductions cap again from 30% to 25% of the standard allowance. This will be effective from October 2021. This requires system development which must be scheduled alongside other important measures already announced as part of our Plan for Jobs and the possible need to make any future urgent interventions, such as the temporary changes made to support claimants in light of COVID-19. There will always be a balance to be struck between setting the deduction cap and ensuring we have adequate protections in place for some of our most vulnerable claimants who struggle with managing their money. Lowering the deduction cap further would not be an effective way to protect vulnerable claimants and is an important element in protecting and preventing claimants from consequences such as utility disconnection, eviction and homelessness and it is that consideration that influences how low any cap on deductions can realistically be. The Department will continue to review its deduction policy to ensure social obligations are met, debt is repaid and – crucially - claimants continue to be protected from the very worst consequences of not addressing priority debts.