Social Security (Additional Payments) Bill

(Limited Text - Ministerial Extracts only)

Committee stage
Wednesday 22nd June 2022 Commons Chamber

[David Rutley]

We have had a useful debate on Second Reading and I welcome the chance for more detailed examination of the Bill in Committee of the whole House. We had an extensive debate, with some probing questions, so I will endeavour—with the support of the Opposition Front Bench and your permission, Mr Evans —to move as fast we can through the Committee stage.

Clause 1 will ensure that the £326 and £324 cost of living payments totalling £650 will be made to an individual or couple who have a qualifying entitlement to a social security benefit or tax credit. The clause also sets out the qualifying benefits and tax credits. Where a claimant is entitled to both a qualifying social security benefit and a tax credit, the social security benefit will be the qualifying benefit for the purpose of receiving a cost of living payment.

Clause 2 sets out who is eligible for the two payments that make up the £650 cost of living payment. It ensures that only those with the entitlement to a positive payment or award in respect of the passporting social security benefit or tax credit will receive a cost of living payment. The aim is to ensure that we target payments to those on the lowest incomes. The clause also defines the relevant eligibility period in relation to the qualifying days set out in clause 1.

[Nigel Mills]

The Minister will be aware that there are some situations in which an employer pays a month’s wages late, wages are paid on a four-weekly cycle and two payments are made in a month, rather than one, or a one-off bonus is paid in a certain month. Those situations could mean that someone who ordinarily gets a UC payment in a month has a month in which they are entitled to nothing. If that happened to be the month that was used for the qualifying payment in this situation, the person would miss out on the whole £326. Would the Minister be tempted to use a two-month period, so if someone gets at least 1p in either month they would get the £326, rather than risk the strange one-offs that could wipe out someone’s monthly payment?

[David Rutley]

I understand the point that my hon. Friend makes. We have already talked about fluctuating earnings. The important thing here is that we have had to define these eligibility periods to be able to get the payments out speedily, and we have also made sure that there is a protection mechanism. There is a wider package of support that is available other than just the £650 cost of living means-tested benefit. There is also the further funding of the household support fund, which will help these individuals.

Clause 3 addresses the situation in which a person has a qualifying entitlement to a social security benefit or a tax credit more than once. It ensures that, where the person is entitled to both universal credit and another social security benefit, they will receive the cost of living payment as a result of their entitlement to universal credit only.

Where a claimant is entitled to both a qualifying social security benefit and a tax credit, the social security benefit will be the qualifying benefit for the purpose of receiving a cost of living payment. Where a person is entitled to both child tax credit and working tax credit, but not a qualifying social security benefit, they will receive the cost of living payment as a result of their entitlement to child tax credit only. That will ensure that a person does not receive duplicate cost of living payments irrespective of whether they have a qualifying entitlement to more than one passported social security benefit or tax credit.

Clause 4 places a duty on Her Majesty’s Revenue and Customs to make a cost of living payment to people whose entitlement to qualifying tax credits only becomes apparent at a later date. The clause will ensure that those people will not miss out, which is a point that has been raised by others in this debate.

Clause 5 places a duty on the Secretary of State to make a disability cost of living payment of £150 to 6 million people who receive eligibility benefit in respect of 25 May 2022. This disability cost of living payment will support disabled people with the additional costs they may face. The clause also sets out the eligible benefits, or the qualifying benefits, for this particular additional payment. To be eligible, the person must have been entitled to a payment of one of these benefits in respect of 25 May 2022.

Clause 6 confirms that the administration rules used for each cost of living payment are the same as the benefit or payment that conferred the eligibility. Clause 7 provides for co-operation between the Secretary of State, the Department for Work and Pensions and HMRC in the delivery of cost of living payments. The scale and scope of the measure also require collaboration with other colleagues across government. Together, the bodies set out in the clause ensure that the intended recipients of the cost of living support are paid. There is a need to have data sharing to minimise the risk of duplicate payments and to support operational delivery.

On clause 8, some important points have been raised on this already on Second Reading. It ensures that the cost of living payments are disregarded for the purposes of tax and social security. I can confirm that the cost of living and the disability cost of living payments are exempt from tax. Payments will not affect a person’s entitlement to social security benefits or tax credits, either as capital or as income. I can also confirm that the payments will not be subject to the benefit cap.

[Nigel Mills]

When my hon. Friend says that they will be disregarded as capital, does that mean that, if somebody quite prudently puts the money in the bank and saves for their high energy bills in the winter, that would not take them over the £16,000 savings limit for universal credit? Effectively, they could ignore not just the receipt of the income, but that part of their savings as well if they were to treat them in that way.

[David Rutley]

Just to clarify, yes. That is the important thing. The clause ensures that every person who is entitled to a cost of living payment receives every penny, as all Members across the Chamber will want to see.

Clause 9 sets out the definition and interpretation of certain terms used in the Bill. Clause 10 explains the procedures for laying the regulations, previously referred to under the powers contained in clause 1(4), to specify the qualifying day for the second cost of living payment, which will be no later than 31 October, and clause 6(5), to apply and disapply regulations around the administration of payments, including overpayments and recovery, as is required. These provisions ensure that regulations made under the Bill can enable the efficient delivery of the second payment in the autumn. Finally, clause 11 defines the territorial extent of the Bill, whose provisions extend to England and Wales, Scotland and Northern Ireland. This ensures that the payments will be payable throughout the United Kingdom.

--- Later in debate ---

I will have more comments to make and questions to ask on Third Reading, but those are my questions and comments on the substance of the clauses in the Bill. One last thing: I thank the Government for including the Scottish payments for disability in the eligibility criteria. In Scotland, we are doing our best to have an excellent social security system on the basis of dignity and respect, and I appreciate the UK Government working with the Scottish Government to ensure that people in receipt of Scottish disability payments will also get the additional £150.

[David Rutley]

I am grateful for the contributions made; I will respond to them briefly. On Scottish qualifying benefits, yes, individuals will be able to receive the £150. As for the second payment, we are having to be careful in setting out the details definitively because of fraudulent behaviour. We certainly saw that with other payments made during the pandemic, so, now that we know the levels of fraud going on around benefits, we cannot be as explicit as perhaps we might have been. However, I assure hon. Members that consideration of the regulations on the second payment will take place after recess.

The other point made was about the timing of cycles. That is important, and we will do everything that we can to ensure that the cycles do not align, so that people who may not have been able to qualify for the first payment will be able to qualify. It will be difficult, because we are moving at extreme pace and with huge volumes of claimants, but we will do everything we can to assist those individuals.

It is not often that the hon. Member for Aberdeen North (Kirsty Blackman) says things that I completely support and agree with, but she did on this occasion. All of us, and particularly the Government, need to do a lot more on communication about these payments. There are lots of them, and they are targeted, so there is a duty on us to communicate clearly when these things are going to happen. However, there are reasons why we cannot be as clear on the timing of the second payment.

I understand the point made by the hon. Member for Westminster North (Ms Buck) on household composition. Sometimes, it would be great to have more data in these situations, but we have produced an impact analysis—that is not always the case in these situations—to ensure that colleagues can understand what is available for their constituents at constituency level. We have also seen the distribution analysis that looks at comparator groups. That is really important data, and I think that it helps to paint a pretty broad picture of how these payments will help vulnerable and low-income families across the United Kingdom.

The household support fund will indeed ensure that we can provide support to people with the cost of essentials. It is vital that local authorities do the work and report back to Government on the work that they have been doing. I hope that, with those points, I have made the case for hon. Members not to press their new clauses.

Question put and agreed to.

Clause 1 accordingly ordered to stand part of the Bill.

Clauses 2 to 11 ordered to stand part of the Bill.

The Deputy Speaker resumed the Chair.

Bill reported, without amendment.

Third Reading

4.50 pm

[David Rutley]

I beg to move, That the Bill be now read the Third time.

I thank the DWP Bill team and the cross-Government officials who have stood up to deliver this legislation and the payment mechanisms at pace. I also thank the House authorities, parliamentary staff, Clerks, Doorkeepers and Members across the House who have participated in today’s debates.

The Bill reflects the Government’s commitment to supporting low-income households and disabled people across the United Kingdom. Due to the current economic circumstances, many people need additional support to alleviate the financial pressures caused by the cost of living challenge. That is why this Government are providing a significant package of support worth £37 billion this year alone. It includes a £150 council tax rebate in England, £400 of support through the energy bills support scheme, a £650 cost of living payment for people entitled to qualifying means-tested benefits, a £150 disability cost of living payment for people entitled to a qualifying disability payment, and £300 in additional support for pensioners through a top-up to winter fuel payments. In practice this means people in receipt of UC or another qualifying means-tested benefit could receive £1,200 in additional support, which could increase to £1,350 if an individual also receives a qualifying disability benefit.

The Bill provides the Government with the necessary powers to administer the £650 cost of living payment and the £150 disability cost of living payment. These payments will provide targeted support to 8 million people including some pensioners and 6 million disabled people. We want to ensure these payments are in people’s bank accounts as soon as possible. We intend to begin phasing in payments from 14 July, subject to the Bill securing Royal Assent on 30 June.

This Bill is a further demonstration of the action this Government are taking to support people across the country and I commend it to the House.