A new report, published on Wednesday, the cross-party Committee of MPs calls for for the Government to reconsider how it provides cost of living support payments. and says these payments to be spread across the winter period, with a payment each month for six months.
The Committee criticises the ‘cliff-edges’ formed as a result of the support, where those who earn just one pound too much, or become eligible for a benefit a day too late, receive no support. This has consequences for fairness and work incentives.
As the support is the same for all recipients, rather than being tapered off as an individual’s income increases, households face missing out on the support if they increase their income through additional work.
The MPs point out that many who require support may not receive it, because they do not receive a means-tested benefit when the assessment for the support payment takes place. For example, an individual who is made redundant may become eligible for a means-tested benefit, but not for the support, if they lost their job outside of the assessment period for cost of living support.
The Committee calls for smaller, more regular support payments to be made, with more frequent assessment periods, in order to smooth these cliff-edges.
Similar cliff-edges also prevent some low-income families from accessing legal aid and free school meals.
Commenting on the report, Harriett Baldwin MP, Chair of the Treasury Committee, said:
“As winter draws in and temperatures drop, many will be worrying about the cost of their energy and heating bills. Alongside the support already provided this year, the Chancellor has told us that further cost of living assistance will be available next winter to recipients of means-tested benefits. This runs the risk of creating perverse cliff-edges and eroding work incentives, and our cross-party Committee is proposing a way of mitigating these risks.”
