Raise the rates of legacy benefits to support people hit hard by coronavirus pandemic, not just Universal Credit, say MPs

• Work and Pensions Committee publishes report on DWP’s response to coronavirus outbreak
• Praises the work of DWP’s frontline staff
• MPs call on Government to raise rate of so-called legacy benefits to remove unfair disparity
• No recourse to public funds condition should be suspended on public health grounds

Rates of older benefits must be raised to provide help for millions of people who have not yet moved to Universal Credit and who are struggling to meet the extra inescapable costs imposed by the coronavirus pandemic, the Work and Pensions Committee says today.

The report on the Department for Work and Pensions’ response to the coronavirus outbreak finds that the pandemic has left huge numbers of people struggling to cover the costs of essentials, with some disabled people in particular hit hard by increased costs of care and rising food prices.

Raise level of pre-Universal Credit benefits – Government must not ‘simply ignore the needs’ of people claiming legacy benefits

• The Committee heard evidence that coronavirus has increased living costs for disabled people. In a survey of 224 disabled people in April, the Disability Benefits Consortium reported that 95% of people surveyed had experienced a rise in costs for food, utilities and managing their health.

• While the Government has raised the rates of standard Universal Credit and basic Working Tax Credits by £20 a week for 12 months, people on benefits yet to be replaced by UC, including Jobseekers Allowance, Employment Support Allowance and Child Tax Credits, have not been similarly helped, with the DWP blaming operational difficulties for the disparity.

• The Committee argues that it is unacceptable that people have been left facing hardship through no fault of their own, simply because of the outdated and complex way in which so-called legacy benefits are administered. It calls on the DWP to boost the rates by an equivalent amount to the rise in UC, backdated to April.   

Suspend No Recourse to Public Funds condition - ‘Hardworking and law-abiding people are being left without a social safety net’

• The report calls for the immediate suspension of the no recourse to public funds (NRPF) condition that has prevented thousands of people who live and work in the UK legally from claiming benefits and receiving access to financial support, because of their immigration status. Some have children who were born in the UK. 

• There is no official estimate of the number of people with NRPF, but the Children’s Society has estimated that the number exceeds 1 million and includes at least 100,000 children.

• The Committee argues that during a pandemic it cannot be in the public interest to expect people, some of whom are 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.

Rt Hon Stephen Timms MP, Chair of the Work and Pensions Committee, 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. 

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. 

At the same time, people whose immigration status leaves them with no recourse to public funds have been left with no support from the benefits system at all—and at risk of destitution and homelessness. Some have had to face the invidious choice between staying at home and facing financial ruin, for themselves and their children, or going to work and risking spreading the disease. The Government must suspend these rules for the duration of the pandemic. 

The labour market will be transformed by coronavirus. Young people, disabled people and people on low pay are among those likely to be worst hit. Large scale employment programmes take months to set up: DWP needs to get on top of this now.”

DWP at ‘heart’ of Government response to coronavirus pandemic – further conclusions and recommendations

• Loss of income because of the pandemic left many people struggling to cover costs of essentials. The Food Foundation found that more than three million people reported going hungry in the first three weeks of lockdown.

• Universal Credit claims since lockdown were ‘unprecedented’, with the number of new claims between 16 March and 26 May standing at 2.9 million, almost doubling the pre-pandemic number of Universal Credit claimants.

• The Committee survey on personal experiences of benefits system received more than 6,000 responses and revealed difficulties some people faced in accessing a safety net.

• The report makes a number of recommendations on tackling the immediate impacts of the crisis and also calls on the DWP to start planning for a labour and jobs market that has been radically changed by the coronavirus pandemic.

Universal Credit

• The minimum five week wait for a first payment leads to many people taking out a repayable Advance, which can often be an additional financial burden.

• The Committee was ‘astonished’ to hear that the system lacked the flexibility to suspend repayments of Advances and calls for the system to be changed to allow it to react more quickly during a crisis.

• Claiming UC has been detrimental for some people already on legacy benefits and recommends that anyone who has been left worse off by making a new claim during the pandemic should be allowed to return to their pre-existing benefits or an equivalent financial position.

Health and Safety Executive

• During the pandemic, the HSE required just one business to close and had not inspected a single care home since March 10. 

• The HSE needs to be clearer in its role to ensure the public has confidence that raising concerns does result in actions against employers where necessary. The HSE should also have specific targets for safety at work spot checks and the Government should ensure that it has the funding necessary to carry out its role.

Pensions

• The Pensions Regulator should be alert to the risk of unscrupulous employers taking advantage of flexibilities introduced to help businesses during the pandemic.

• There has been an increase in pensions scams caused by the pandemic. The Committee plans to look into pension scams in more detail in the near future. 

Transformed labour market

• The Government must start planning now for the economic downturn and transformed labour market brought about by the coronavirus pandemic. The DWP should focus particularly on supporting young people, people with caring responsibilities, older workers, disabled people and people previously on lower pay.

• The Department should outline its planned employment programmes and its strategy for working with businesses, local government and other sectors in response to the downturn.