StepChange responds to Work and Pensions Select Committee report on benefits
21 March 2024
StepChange is pleased to see the Work and Pensions Select Committee’s new report on benefit levels make a number of key recommendations that the charity supports, including:
- The Government should make the Household Support Fund permanent. The HSF received a six-month extension in the recent Budget and allows local authorities additional funding so that they can offer discretionary support to those in the most pressing need in their areas.
- The Government should develop principles and a benchmark linked to living costs to deliver effective, adequate benefit levels.
- The Government should make an ‘uprating guarantee’ to increase benefits annually, based, for example, on prices.
Half of StepChange client who rely on Universal Credit have a deficit budget, which means they do not have enough income to meet their essential costs. These proposals would make a valuable difference to people affected by life events who are too often at risk of deepening problem debt because benefit payments fall short of the bare minimum needed to pay for essentials.
It is crucial the Government also takes steps to prevent unaffordable deductions from benefits to repay government debts, which are too often reducing already inadequate benefit levels. The charity’s research shows that deductions are often applied unnecessarily and leave more than nine in 10 of clients affected struggling to meet their basic needs. We have called on the Department for Work and Pensions to cap deductions for advances and overpayments at 5% of the Universal Credit standard allowance and all deductions at 15%.
In the long-term, we would like to see the Government establish an independent body, modelled on the Low Pay Commission, to advise ministers on benefit adequacy and a sustainable pathway to relink the level of support provided by working-age benefits to the minimum needs of households.
Commenting on the report, StepChange Head of Policy Peter Tutton said:
“This well-judged report from the cross-party Work and Pensions Committee highlights the urgent need to make benefits fit for purpose in meeting people’s basic expenditure needs. This really matters, because at the moment people like our clients receiving Universal Credit too often just don’t have enough money to cover the essentials, putting them into a negative budget and often having no choice but to borrow to keep up and risk debt problems, when they have turned to the social safety net to cope with challenging life events.
“We welcome the calls to make the Household Support Fund permanent, create a proper framework for benefits linked to living costs, and provide an uprating guarantee. We’d also highlight the need to make sure that deductions from benefits are only ever made if they are affordable and consistent with responsible practice in debt collection. Among our clients, a survey showed that 98% of those who had deductions made from their Universal Credit payment for benefit overpayments were not left with enough to cover their essential needs. Together, these steps would go a long way to reduce the number of benefit claimants who experience hardship and problem debt.”
Notes to Editors
- To view a copy of the Work and Pensions Committee report please refer to WORKPENCOM@parliament.uk or https://committees.parliament.uk/committee/164/work-and-pensions-committee