All 2 David Rutley contributions to the Social Security (Additional Payments) Act 2022

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Wed 22nd Jun 2022
Wed 22nd Jun 2022
Social Security (Additional Payments) Bill
Commons Chamber

Committee stageCommittee of the Whole House & Committee stage

Social Security (Additional Payments) Bill Debate

Full Debate: Read Full Debate
Department: Department for Work and Pensions

Social Security (Additional Payments) Bill

David Rutley Excerpts
David Rutley Portrait The Parliamentary Under-Secretary of State for Work and Pensions (David Rutley)
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I thank those who have contributed to this debate. I echo the points made by my right hon. Friend the Secretary of State to stress the importance of this urgent legislation to support people up and down the country. The sharp increase in the cost of living is a challenge shared across the globe due to the aftershocks of covid on global supply, amplified by Russia’s unacceptable invasion of Ukraine. This Bill is the flagship component of our bold package of cost of living additional payments which have been designed to help people to cope with increased costs.

We are grateful for the support of Opposition Front Benchers in facilitating the speedy progress of the legislation. It is vital that these payments get to the people who need them. I am also very grateful for the contributions that have highlighted that these are a serious response to serious challenges, such as those made by the Chair of the Select Committee, the right hon. Member for East Ham (Sir Stephen Timms), as well as by my right hon. Friend the Member for Preseli Pembrokeshire (Stephen Crabb) and my hon. Friend the Member for Amber Valley (Nigel Mills).

The support provided through this Bill is timely and comprehensive, and we are taking significant steps and targeting resource to support those in greatest need. The spirit of this Bill is in line with the approach that the Government have taken since the start of the pandemic, which has been shown to deliver for the people of this country in challenging times. We will continue to work hard to help people on low incomes get the support that they need.

We have worked hard through the vaccine roll-out, through the dedication of amazing people, to reopen society, and our economy has responded positively. There are record numbers of people in payroll employment, unemployment is just 3.8%, which is around the lowest level since the 1970s, and there are 1.3 million vacancies, which we are working diligently with employers and communities to fill. My hon. Friend the Member for Ashfield (Lee Anderson) will be pleased to know that, given his focus on work.

With all the work going on to help get people into work and progress in work, we recognise that people do need additional support in dealing with the cost of living challenges. That is why the Chancellor has set out his generous package, with another £15 billion of targeted support, which brings our total package to £35 billion this year alone. Of these additional payments, a particularly important one is the means-tested benefit that will provide a £650 one-off cost of living payment. It will be paid in two instalments to recipients entitled to qualifying means-tested benefits or tax credit. The first starts on 14 July and the second, of £324, later in the year. The hon. Member for Richmond Park (Sarah Olney) asked if there could be one payment. I understand the point she made, but we have consciously staggered the payments to help people on low incomes with their budgeting, which I hope she will welcome. The other important element of the Bill is providing disability cost of living payments of £150, which will go to 6 million people in the United Kingdom and will be paid in September.

We have deliberately kept the rules of the additional cost of living payments as simple as possible, because that is the way we can ensure that we develop the systems and processes required to make the payments at pace. I pay tribute to the hard work of officials across the Government to make that possible.

There are a number of contributions in the debate to which I need to respond. The benefit cap was raised by the right hon. Members for East Ham and for Leicester South (Jonathan Ashworth) and also by my hon. Friend the Member for Amber Valley. We have kept the payments very simple both for those receiving them and for Government systems. They are tax-free, they will not impact on benefit entitlement or the benefit cap, and they will be paid to people without the need for paperwork. They will be paid into people’s bank accounts.

The hon. Member for Aberdeen North (Kirsty Blackman) made points about uprating. Of course, as the Secretary of State said in her speech at the start of the debate, there will be an annual review of benefits and pensions for the tax year 2023-24, which will commence in the autumn as per convention.

Some hon. Members have highlighted the legacy systems and pensions, and asked why we cannot do uprating more frequently. I think we know that the legacy systems are not that agile. Of course, what we are trying to do and working very hard to do—recognising how flexible universal credit is and how resilient it has proven through the pandemic—is to move people through to universal credit by the end of 2024.

Stephen Timms Portrait Sir Stephen Timms
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I want to go back to what the Minister said about the benefit cap, and I welcome the point he made. Does he recognise that, in a very high inflation environment, there really is quite a compelling case for looking again at the level of the benefit cap for next year alongside the other benefit uprating matters?

David Rutley Portrait David Rutley
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There is a statutory duty to review benefit cap levels at least once every five years, and this will happen at the appropriate time. When the Secretary of State decides to undertake the review, she will consider the national economic situation and any other matters she considers relevant at that moment in time.

I reiterate that carer’s allowance is not a means-tested benefit. Nearly 60% of working-age people on carer’s allowance will get the cost of living payment as they are on means-tested benefits or disability benefits. Carer’s allowance recipients will benefit from the £400 per household universal support being provided to help with the cost of energy bills.

People who receive carer’s allowance may live in a household that will benefit from the Government’s support package. For example, they may live with someone who receives a means-tested benefit, a disability benefit or tax credits. If so, the household will benefit from the cost of living payment.

The hon. Member for Westminster North (Ms Buck) has asked me in a number of debates why this measure does not more fully reflect different family sizes and formations. The challenge is trying to get these payments out as fast as possible. To do that, we need to get the payments out to “single benefit units,” as they are described, and households. The important thing to highlight is that most low-income families will be able to receive the £150 council tax support and the energy bill support, on top of the work allowance taper and the increase in the national living wage.

It is not possible to distinguish between those who have a permanent increase in their earnings and those whose earnings are temporarily fluctuating. If a UC claimant’s income subsequently falls, they will return to having a positive award after the cut-off date, and they may be eligible for the second payment.

The right hon. Member for Leicester South talked about the minimum income floor, which ensures we do not prop up unproductive employment or self-employment indefinitely. There is a start-up period to protect newly self-employed people. Beyond that, having a minimum income floor is the right policy. If it means there is a nil UC payment, the claimant would not be entitled to the means-tested payment. However, they would get the £400 energy payment and the £150 council tax rebate, and they would potentially be eligible for the household support fund. It is worth recognising that there are paid employment opportunities out there, given the high level of vacancies.

We have heard about the take-up of pension credit, and I am sitting next to the expert, the Under-Secretary of State for Work and Pensions, my hon. Friend the Member for Hexham (Guy Opperman).

David Rutley Portrait David Rutley
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Whatever we want to call him, he will take this forward with aplomb, that is for sure.

There was a serious question about why the number of means-tested benefit recipients will fall in the second cost of living payment period, and it is because the projections reflect mortality rates. However, they do not reflect the important work many of us are doing to raise awareness, so hopefully many more people will claim it.

I think I have now answered most of the questions. The hon. Member for Richmond Park asked about industrial injuries disablement benefit, on which I would be more than willing to talk to her separately. We should not underestimate the additional payments from the household support fund to help people with the cost of essentials. The Chancellor announced another £500 million in his latest statement, and it will be available from October 2022 to March 2023.

In England, the £421 million household support fund will be administered by local authorities, and the devolved Administrations will receive £79 million through the Barnett formula. Importantly, there will be new guidance to local authorities on this latest extension of the household support fund to reflect the fact that some people who are not able to secure these additional payments will be able to go to their local council to secure support.

Kirsty Blackman Portrait Kirsty Blackman
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Some household support funds ran out months earlier than expected. Does the Minister expect the new funds will be sufficient and will last as long as they are supposed to last?

David Rutley Portrait David Rutley
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The current tranche of household support fund is on top of all the other benefits we have talked about. As we have said, these are substantial additional support payments that are being made available, and the £500 million on top is there to help those people who have further needs with the cost of essentials. Further guidance will be made available.

We are working at unparalleled pace to get money into people’s pockets. It is vital that we meet the deadline for Royal Assent by 30 June, after a fast-tracked passage, so that we do not create a strong risk that we fail to make payments in July. We want to make sure that the most vulnerable people in our society—people on low incomes, people with disabilities—get the payments and support that they need. As I have highlighted already, this payment package in total comes to £37 billion this year alone. The Bill helps to deliver key elements of the support package to those who need it most. I strongly support these measures and commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time; to stand committed to a Committee of the whole House (Order, this day).

Further proceedings on the Bill stood postponed (Order, this day).

Social Security (Additional Payments) Bill: Money

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the Social Security (Additional Payments) Bill, it is expedient to authorise the payment out of money provided by Parliament of:

(1) a sum not exceeding £326 to anyone who is entitled, in respect of 25 May 2022, to—

(a) universal credit or state pension credit,

(b) an income-based jobseeker’s allowance, an income-related employment and support allowance or income support, or

(c) working tax credit or child tax credit;

(2) a sum not exceeding £324 to anyone who is entitled, in respect of a day after 25 May 2022 and not later than 31 October 2022, to a benefit mentioned in paragraph (1);

(3) a sum which, together with any sum paid as mentioned in paragraph (1) or (2), does not exceed £650 to anyone who receives a working tax credit or child tax credit of at least £26 in the tax year 2022- 23;

(4) a sum not exceeding £150 to anyone who is entitled, in respect of 25 May 2022, to—

(a) a disability living allowance,

(b) a personal independence payment,

(c) an attendance allowance or a constant attendance allowance,

(d) an adult or child disability payment,

(e) an armed forces independence payment, or

(f) a mobility supplement.—(Michael Tomlinson.)

Question agreed to.

Social Security (Additional Payments) Bill Debate

Full Debate: Read Full Debate
Department: Department for Work and Pensions

Social Security (Additional Payments) Bill

David Rutley Excerpts
David Rutley Portrait David Rutley
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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 Portrait Nigel Mills
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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 Portrait David Rutley
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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 Portrait Nigel Mills
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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 Portrait David Rutley
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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 Portrait David Rutley
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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 Portrait David Rutley
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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.