Source · Select Committees · Work and Pensions Committee
Recommendation 4
4
Rejected
Paragraph: 27
Change cost of living payment eligibility for UC claimants with nil awards in qualifying periods.
Recommendation
The Government should change the eligibility for the final cost of living payment in 2023/24 and for any possible future payments so that Universal Credit (UC) claimants who receive a nil UC award in the qualifying period, but received a payment in the previous and subsequent assessment period, qualify for a cost of living payment. This could be incorporated into the mop-up payment system.
Government Response Summary
The government rejects changing eligibility for nil-award Universal Credit claimants, citing that substantial changes would introduce complexity, risk delays, fraud, or error, and that DWP IT systems cannot distinguish reasons for nil awards.
Paragraph Reference:
27
Government Response
Rejected
HM Government
Rejected
The Department recognises the frustration households may experience if they received a nil UC award during the qualifying period, and therefore are not in receipt of an instalment of the Cost of Living Payment. However, although the Department carefully considered any possible changes for 2023/24, any substantial changes to the policy would introduce complexity, risking delays to payments or introducing unacceptable levels of fraud or error. UC households can receive a nil award for various reasons, as set out earlier, but the majority are due to the amount of household earnings. As previously stated, whichever eligibility dates are selected, there will always be some individuals who are ineligible in the qualifying period. Employees who receive arrears of earnings and/or lump sum payments in one month, could have their Universal Credit award reduced to zero in the same month and lose their entitlement to a Cost of Living Payment as a result. DWP IT systems are unable to distinguish whether an increase to a claimant’s earnings is temporary or permanent. Keeping the rules for this policy simple enabled the Government to make over 30 million separate payments for 2022/23 to support with the cost of living while maintaining core benefit delivery. 85% of those who received no Universal Credit award during the qualifying period for the first 2022 Cost of Living Payment of £326, had no award solely due to earnings. Of those with no award due to earnings, most had no Universal Credit award for six assessment periods following the qualifying period solely due to earnings or left Universal Credit altogether. Paying those with financial resources available, which would make them ineligible for means-tested benefits, is not the intention of the Cost of Living Payments which are aimed at those on the lowest incomes. The Cost of Living Payment is being delivered in three separate payments over 2023/24 to reduce the chance of someone missing out altogether due to receiving a nil UC award. As mentioned above, the guidance for the current Household Support Fund in England asks local authorities to provide support with the cost of essentials to those most in need, and in particular, that they should consider supporting those who have missed out on other recent support made available such as the Cost of Living Payments.