Millions of families on low incomes who are currently battling the out of control cost of living would get a £25 per week boost if new proposals put to the DWP go through. The Government department has been told to reverse 'devastating cuts' which saw the Universal Credit top-up during the pandemic scrapped altogether.
For an 18-month period, Universal Credit claimants saw a £20 per week increase to help aid the economic impact of Covid and the subsequent lockdowns - while a similar amount landed in the accounts of tax credit claimants too. But the booster, amounting to an extra £1,560, was cut in October 2021 - with the DWP saying it was just a temporary measure.
A legal battle by people on other benefits to get the same sum in backpay was denied by the Court of Appeal.
Read more: DWP reviewing Universal Credit, PIP and other benefits in fraud and error crackdown
Birmingham Live reports that research indicates without the £20-a-week uplift, people are being plunged into a financial black hole. In new findings published last Sunday, the Institute for Fiscal Studies says axing that top-up is expected to have pushed 100,000 people into absolute poverty in 2022/2023.
David Linden, Shadow SNP Spokesperson (Social Justice) and a member of the House of Commons Work and Pensions Committee, has called for the uplift to be reinstated. He wants it to be a higher amount of £25 a week this time and given not just to Universal Credit claimants but also to other means-tested benefits, meaning they would all see payments increased by £100 a month.
He told MPs: "The Joseph Rowntree Foundation's latest cost of living tracker found that 5.7 million low-income households are having to cut down or skip meals because they do not have enough money for food, while the number going without items such as food, heating and basic toiletries has remained at about 7 million for more than a year - all of that in the sixth largest economy in the world.
"The basic rate of Universal Credit is now at its lowest level as a proportion of average earnings. Indeed, the JRF's latest cost of living tracker warns that about nine in 10 low-income households on UC have gone without at least one essential for the third survey in over a year.
He told MPs: "The Joseph Rowntree Foundation's latest cost of living tracker found that 5.7 million low-income households are having to cut down or skip meals because they do not have enough money for food, while the number going without items such as food, heating and basic toiletries has remained at about 7 million for more than a year - all of that in the sixth largest economy in the world.
"The basic rate of Universal Credit is now at its lowest level as a proportion of average earnings. Indeed, the JRF's latest cost of living tracker warns that about nine in 10 low-income households on UC have gone without at least one essential for the third survey in over a year.
"Rather than offering one-off payments to shore up struggling families' incomes, the DWP should reverse the damaging policies that are impacting the most vulnerable people. It should reinstate the Universal Credit uplift at £25 per week and, of course, extend it to legacy benefits. Let us not forget the 2.5 million disabled people who were cruelly left behind without that uplift during the pandemic.
"The Government also needs to remove the benefit cap and the two-child limit. They also need to halt the punitive sanctions regime so that all households are lifted out of poverty now and in future."
In its research, the Institute for Fiscal Studies said the £20-a-week boost to Universal Credit had taken 379,000 people out of poverty in 2021/2022. It added that a further change that lowered the 'taper rate' - the amount of Universal Credit that is docked as people's wages go up - had lifted 133,000 individuals out of poverty.
Mr Linden says the Government 'must reverse their devastating cuts to the Universal Credit top-up, increase it to £25-per-week and extend it to means-tested legacy benefits' as households continue to deal with the cost of living crisis. Guy Opperman, Minister of State at the Department for Work and Pensions, said: "Universal Credit, as we see, provides a massive amount of support on an ongoing basis, which is targeted to help those most impacted by rising prices throughout this financial year."
He added: "Targeted support includes support for people on means-tested benefits such as Universal Credit, with up to three cost of living payments totalling up to £900. We have delivered the first £301 payment to 8.3 million households in support worth £2.5 billion. The two further payments of £300 and £299 will be made in the autumn and next spring.
"To help with additional costs, we have paid the disability cost of living payment to 6 million people as well as paying the winter fuel support payment.
"A huge amount is being done in jobcentres, whether that is through the in-work progression offer, the support of extra work coaches, the over-50s support, the administrative earnings threshold support or the 37 new district progression leads who are working with key partners, including local government, employers and skilled providers, to identify and develop local opportunities and to overcome barriers that limit progression."
