MPs have urged the Department for Work and Pensions (DWP) to pause deductions from benefits to help families who are struggling to get by due to the ongoing cost-of-living crisis.
A new report from the Work and Pensions Committee has warned that deductions from benefits, usually taken to recover money owed for debts and advances, are pushing some people into hardship and leading them to depend on foodbanks.
The committee called on the DWP to pause the deductions and restore them gradually only as the rate of inflation – which is currently at a 40 year high – reduces, or when benefits have been increased to accurately reflect the rise in prices.
The committee also recommended that the Government review and increase the benefit cap, which has remained frozen since it was lowered in 2016.
‘Inflation is at a 40 year high, with spiralling energy, food and fuel prices adding up to a cost of living crisis not seen for a generation and a bleak outlook for many families,’ said committee chair Stephen Timms MP.
‘Deductions by DWP from benefits are contributing to the hardship and the Government should give those struggling some much needed breathing space by following its own advice to other creditors and pausing repayments until the threat of inflation recedes.
‘Ministers also need to urgently review and uprate the benefit cap. The decision to exempt cost of living payments from the cap suggests the Government knows it is set too low to effectively cover households’ now rapidly rising costs.’
Responding to the report, a DWP spokesperson said: ‘We’ve reduced the amount that can be taken through benefit deductions twice in recent years to no more than 25%. We’ve also doubled the time period over which they can be repaid and claimants can contact DWP to discuss deductions if they are experiencing financial hardship.
‘We recognise people are worried about the impact of rising prices, that’s why we’re providing £37bn of additional cost of living support. This includes £1,200 in direct payments for eight million low-income households, most of whom received an initial £326 earlier this month.
‘As part of our support package, we’ve also frozen energy deductions on Universal Credit, meaning any new request from energy suppliers for bills to be paid directly from benefits, or for an existing payment to rise, is denied unless the claimant also requests it.’
Mr Timms MP acknowledged that the Government had put in place a number of ‘emergency measures and one-off payments’ to help with the cost-of-living crisis, but he said these were no substitute for a regular income.
‘A properly functioning social security safety net should be agile enough to respond to worsening economic conditions, but the high levels of inflation have laid bare the dysfunctional nature of parts of the system – not least that any increase in benefits is already seven months out of date when it takes effect,’ he said.
‘While the Government’s emergency measures and one-off payments are welcome, there is no substitute for regular, predictable income when it comes to households trying to get by. Lump sum payments may not be needed if uprating was not so impotent in the face of rising prices.
'The Government must urgently increase the speed with which the DWP’s systems can make changes to benefit and pension rates to make sure the social security safety net lives up to its name for the most vulnerable people in our society.’
