Benefits levels leave many unable to afford daily essentials or meet extra costs of disability, say MPs

Following a year-long inquiry, the cross-party Work and Pensions Committee of MPs has published its report considering benefit levels for working-age people and whether they are meeting the needs of claimants

The new report sets out a wide range of evidence which suggests that benefit levels are too low, and that claimants are often not able to afford both daily living costs and extra costs associated with having a health condition or disability.

For example, a wide range of organisations gave evidence that Personal Independence Payment (PIP) levels were too low, and this was made worse by insufficient income replacement benefits such as universal credit (UC) forcing Disabled claimants to “steal” from their extra cost payments, in order to meet other basic needs.

Shortfalls in the support provided through health and disability benefits were found to have a negative physical and mental health impact on claimants, which in turn could affect their ability to work.

While the Committee welcomes the Government’s recommitment in its February 2024 Disability Action Plan to take forward plans to set up an Extra Costs Taskforce to understand the extra costs disabled people face in their daily lives it recommends that the DWP should be part of this:

“Once operationalised, DWP should use findings from the Taskforce to set a benchmark for the health and disability related costs it intends PIP to cover. It should then set out how it intends to reach this benchmark alongside annual uprating.

“There is a persuasive case that there should be a greater number of levels of support provided through PIP -both higher and lower - to reflect more accurately the experiences of claimants.

“The Department should introduce further levels of support through PIP and the new Health Element of Universal Credit in time for the start of financial year 2025/2026.”

In concluding remarks, the Committee make 19 recommendations to the Government, that include the following:

Set out clear, measurable objectives and a benchmark for benefit levels linked to living costs would enable the DWP to measure progress and improve accountability in the system
Having established a benchmark, the DWP should review the extent to which current benefit levels are meeting this benchmark. If DWP finds that it is not meeting these objectives, it should set out how it intends to reach them alongside annual uprating
There is a persuasive case that there should be a greater number of levels of support provided through PIP—both higher and lower—to reflect more accurately the experiences of claimants. The DWP should introduce further levels of support through PIP and the new Health Element of UC in time for the start of financial year 2025/2026
From financial year 2025/2026, the Government should make an ‘Uprating Guarantee’ to uprate benefits annually with a consistent measure, for example prices.
To ensure that policies designed to allocate and limit benefit entitlement operate as originally intended, the Government should commit to uprating the capital limit rule in means-tested benefits, the benefit cap and the earnings threshold in Carer’s Allowance on an annual basis
Following the completion of migration to UC, the Government should aim to reduce the length of time between the measure of inflation used for uprating, and the uprating implementation date. The Government should retain this new, shorter uprating reference period each year to maintain consistency within the system
The Household Support Fund should be made a permanent feature of the social security system. This would enable local authorities to plan their provision of discretionary support to households better.
The Government should make a commitment to uprate annually Local Housing Allowance so that it retains its value at the 30th percentile of rents in a Broad Rental Market Area
There is scope for the DWP to commission independent research, either via an independent body, such as the Social Security Advisory Committee, or ad-hoc, to supplement its own review of the extent to which current benefit levels are meeting its objectives for what benefit levels should achieve in relation to living costs

Finally, the Committee expresses concern that there is not sufficient capacity in the system to absorb the number of claimants who will be made subject to conditionality, or increased conditionality, following announcements made in the 2023 White Paper, as well as planned changes to the Work Capability Assessment:

“This could have a negative impact on claimants and on Work Coaches, who conduct valSpring Budget and 2023 Autumn Statemenued work in our constituencies. To improve transparency, the Department should include in its quarterly statistics release, the number of Work Coaches and the average number of claimants they are responsible for.

“This would help inform an understanding of the pressures on Work Coaches, provide information on the number of Work Coaches working in Jobcentres and help inform an assessment of whether there is sufficient Work Coach capacity in the system.

“The Department should also include the number of Disability Employment Advisers (DEAs), the number of Disability Employment Adviser Leads (DEALs), and the number of Work Coaches DEAs and DEALs are supporting in Jobcentres.

The Committee’s report Benefit Levels in the UK is available from committees.parliament.uk.

DR UK’s written evidence to the Committee is available here.

Oral evidence given by DR UK’s Welfare Rights and Policy Officer Ken Butler is available here.