There is a fine line between ensuring that taxpayers’ money is spent correctly and allowing claimants to retain as much of their award as possible for day-to-day needs.
The standard deductions cap has been reduced three times – from 40 per cent to 30 per cent to 25 per cent. This has helped hundreds of thousands of UC claimants to retain more of their awards. Reducing the standard cap below 25 per cent would reduce the range of debts a claimant could address, and risk vital obligations (such as Child Maintenance payments) not being made at all.
Claimants can contact DWP Debt management if they are experiencing financial hardship, to discuss a reduction in their rate of repayment or a temporary suspension, depending on their financial circumstances.
Moreover, the Government is taking decisive and unprecedented action to support households with the cost of living.
On energy bills, the Government is maintaining the Energy Price Guarantee. This guarantee, limits the amount you can be charged per unit of gas or electricity. The current price guarantee, set at £3,000, will support households between now and April 2024. Although energy prices are currently below the level at which EPG payments would be made, it will remain in force until the end of March 2024 to protect households from price spikes, putting in place a safety net for households up and down the country.
Furthermore, at the Autumn Statement 2022, the Government announced a substantial support package for the most vulnerable for 2023/24, including £300 Cost-of-Living Payments for pensioners, £150 for people on disability benefits, and £900 for people on means-tested benefits. The Government is also providing £1 billion of extra funding by extending the Household Support Fund to March 2024, bringing the total of the Fund to £2.5 billion. Benefits were also increased by 10.1 per cent in April 2023, in line with inflation.
I will continue to engage with ministerial colleagues to ensure that benefits recipients receive the support they need to cope with the cost of living.