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Wed, 23 September 2020

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Coronavirus: DWP ‘must not ignore’ people claiming legacy benefits after Universal Credit boost

Coronavirus: DWP ‘must not ignore’ people claiming legacy benefits after Universal Credit boost

The Department for Work and Pensions. (PA)

3 min read

The Government must boost a host of legacy welfare benefits to help people cope with the coronavirus crisis, MPs have said.

A new report by the Work and Pensions Committee says the pandemic is leaving “huge numbers” of people “struggling to cover the  cost of essentials.

The Government has already raised Universal Credit and Working Tax Credit payments by £20 a week for 12 months.

But the committee warns that those on benefits that have not yet been replaced by Universal Credit — including Jobseekers Allowance, Employment Support Allowance and Child Tax Credits — have not received the same help.

The cross-party group says it is “unacceptable that people have been left facing hardship through no fault of their own, simply because of the outdated and complex way in which so-called legacy benefits are administered”.

And they call on the DWP to increase rates for legacy benefits by an equivalent amount, with the payment backdated to April.

Committee chairman Stephen Timms said: “DWP’s frontline staff have worked hard to get support to millions of people. Without their actions, the impact of the pandemic could have been much worse. 

“But the coronavirus pandemic has highlighted weaknesses in a social security system which at times is too inflexible and slow to adapt to support people in times of crisis.”

He added: “The focus has mostly been on the unprecedented numbers of new claims for Universal Credit. But in the background, people on legacy benefits—including disabled people, carers and people with young families—have slipped down the list of priorities. 

“It’s now time for the Government to redress that balance and increase legacy benefits too. It’s simply not right for people to miss out on support just because they happen, through no fault of their own, to be claiming the ‘wrong’ kind of benefit.”

The committee is also calling on ministers to ditch the long-standing ‘No Recourse To Public Funds’ immigration rule, which sees thousands of migrants routinely shut out of access to state benefits including Universal Credit.

They say it “cannot be in the public interest” during a pandemic to expect people who include key workers and front-line medical staff to “comply fully with restrictive public health guidance while simultaneously denying them full access to the welfare safety net".

SAVINGS GAP

The report by the Work and Pensions Committee came as a separate study by the Resolution Foundation think tank revealed that poorer households are being pushed into borrowing during the coronavirus pandemic while richer ones are able to pile up the savings.

The study, carried out with the Standard Life Foundation, also found that typical workers in a shut-down sector of the economy went into the crisis with average savings of just £1,900, far less than the average amount squirrelled away (£4,700) by someone who is now able to work from home.

A quarter of the poorest households say they have increased their use of consumer credit during the crisis, while just one-in-eight high income households have done so — and a third (34%) of richer households are seeing savings increase.

George Bangham, Economist at the Resolution Foundation, said: “The impact of coronavirus crisis will be with families for many years to come. 

“That’s why it’s important for the Government to both strengthen the social security safety net via Universal Credit, and assist more low and middle-income households in building up their private safety nets by boosting their savings.”

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