The reason more regular cost of living payments cannot be made is a result of ‘clunky government systems’ according to the Treasury Committee. It highlighted constraints within the Department for Work and Pensions (DWP) payments system as an obstacle to payments being more frequent.
More than eight million people are exempted to receive the £900 cost of living support over 2023/24 as part of the UK Government’s wider support package for those on a low income, people on disability benefits and pensioner households. The £900 will be given to people on means-tested benefits in three payments made directly into bank accounts, in spring 2023 (£301), autumn 2023 (£300) and spring 2024 (£299).
In December 2022, the cross-party committee of MPs said cost of living support payments to people on means-tested benefits should be spread over next winter, with a payment each month for six months.
The MPs argued that smaller, more frequent support payments would smooth the “cliff-edges” which arise when someone who earns just one pound too much, or becomes eligible for a benefit a day too late, receives no support.
Households face missing out on the support altogether if they increase their income through additional work, the committee said.
In the response, published on February 27, the UK Government stated it cannot make more frequent payments due to limitations with its systems. Doing so could compromise the delivery of “core benefits”.
The UK Government said cost of living payments are made using the DWP’s “ad hoc payment system”.
It said: “This sits outside the normal benefit delivery system and as a result, is limited in its nature - for example it can only make one payment ‘type’ at a time, and it requires specialist teams to make the payments.”
Further “mop-up” payments for some of the qualifying benefits are also expected to be made, if an entitlement that would qualify someone for a payment is later established to have existed.
The UK Government said it had concluded that three means-tested cost of living payments and a single disability cost of living payment “balances spreading the support throughout the year and enables sufficient time for delivery of each payment without compromising core benefit delivery”.
Adding further payments could also delay “mop-up” payments to some people, it said.
The UK Government also said it had considered the payment design of cost of living payments to limit “any perverse work disincentives generated”.
It said: “In particular, in line with the approach taken for 2022-23 cost of living payments, qualifying dates for each payment in 2023-24 will be announced after they have passed.
“The purpose of this is to deter fraud and to mitigate risks to work incentives.”
The committee also found the UK Government had collected limited data on the effectiveness of the household support fund and the number of low-income households outside of the benefit system.
Harriett Baldwin, chair of the Treasury Committee, said it is “disappointing to hear that clunky systems will prevent the delivery of six regular support payments next winter”.
She said: “The lack of analysis on the effectiveness of the household support fund is surprising, and I strongly encourage the Treasury to step up its data collection, particularly looking at whether these billions of pounds of extra help have supported those struggling the most.
“The Chancellor rightly aspires to support the most vulnerable while making work pay.
“Outdated systems and a lack of statistics on how these important schemes are working make his job harder. We thank the Government for such a considered response and look forward to further work in this area in the near future.”
A Government spokesperson said: “We are protecting the most vulnerable households with up to £1,350 of direct support in 2023-24, on top of £1,200 delivered to millions of people last year.
“It would be impossible to choose eligibility windows for the cost-of-living payments that work for every single person, which is why the next payments are being made in three instalments to reduce the chance of someone missing out completely.
“In addition, many of our payments including cost-of-living payments, those made through the energy bills support scheme and winter fuel payments have been staggered throughout the year, while the household support fund is available all year round.”
You can read the Treasury Committee report online here.
To keep up to date with the latest cost of living news, join our Money Saving Scotland Facebook page here, or subscribe to our newsletter which goes out daily, Monday to Friday - sign up here.
READ NEXT
Check how much of the £1,350 cost of living payments you are due this year
- Specific group of people who will not receive new £301 cost of living payment due this Spring
New interactive map helps people find free warm spaces in their area just by entering postcode
DWP rule change this month for couples working 24 hours or more each week between them
New cost of living payment warning to people due money over next few months
