Chanellor Rishi Sunak had today unveiled a range of measures to help families and individuals with the growing cost of living crisis.
Addressing parliament, Mr Sunak said: “Over eight million households already have incomes low enough for the state to be supporting their cost of living through the welfare system.
“They could be temporarily unemployed and looking for work. Unable to work because of long-term sickness or disability. Or on low pay and using benefits to top up their wages. Right now, they face incredibly difficult choices.
“So, I can announce today we will send, directly to around eight million of the lowest income households, a one-off Cost of Living Payment of £650. Support worth over £5bn to give vulnerable people certainty that we are standing by them at this challenging time.
“DWP will make the payment in two lump sums – the first from July, the second in autumn, with payments from HMRC for those on Tax Credits, following shortly after.
“There is no need for people to fill out complicated forms or bureaucracy – we will send the payment straight into their bank accounts.
“Our policy will benefit over eight million households in receipt of means-tested benefits, from July.
“Uprating, in that time frame, could only be done for those on Universal Credit. And our policy will provide a larger average payment this year of £650. Whereas uprating the same benefits by 9% would only be worth, on average, £530.
“There are two further groups who will need targeted extra support.
“Many pensioners are disproportionately impacted by higher energy costs. They can’t always increase their incomes through work.
“And, because they spend more time at home, and are more vulnerable, they often need to keep the heating on for longer.
“And we estimate many people who are eligible for Pension Credit are not currently claiming it… which means there will be many vulnerable pensioners not receiving means-tested benefits.
“So, I can announce today that, from the autumn, we will send over eight million pensioner households who receive the Winter Fuel Payment – an extra, one-off Pensioner Cost of Living Payment of £300.
“Disabled people also face extra costs in their day-to-day lives – like having energy-intensive equipment around the home or workplace.
“So, to help the 6 million people who receive non-means tested disability benefits, we will send them, from September… an extra, one-off Disability Cost of Living Payment, worth £150.
“Many disabled people will also receive the payment of £650 I have already announced, taking their total cost of living payments to £800.
“And I can reassure the House that next year, subject to the Secretary of State’s review, benefits will be uprated by this September’s CPI… which, on current forecasts, is likely to be significantly higher than the forecast inflation rate for next year.
“Similarly, the triple lock will apply for the state pension.
“Of course, we recognise the risk that, as with any policy, there may be small numbers of people who fall between the cracks.
“For example, it is not possible right now for DWP or HMRC to identify people on Housing Benefit who are not also claiming other benefits.
“So, to support them and others, we will extend the Household Support Fund, delivered by Local Authorities, by £500m from October.
“This is a significant set of interventions to support the most vulnerable in our country.
“We will legislate to deliver this support on the same terms in every part of the United Kingdom – including Northern Ireland.
“And, taken together, our direct cash payments, will help one third of all UK households with the cost of living, support worth over £9bn.”
Un-paid carers overlooked
Responding to the announcement, Helen Walker, Chief Executive of Carers UK, said: “The announcement today will bring some welcome comfort to carers who are on means-tested benefits and who are also pensioners as they’ve faced soaring costs, increasing the stress of caring for relatives and friends who are disabled, ill or older and need help.
“They have been struggling with decisions every day about whether to heat or eat and they’ve been terrified about what this will mean for them and their family.
“However, there are several hundred thousand carers who don’t receive means-tested benefits, but who are in receipt of Carer’s Allowance, the main carers’ benefit.
“They will be shocked and devastated to see that they won’t get any of the extra payments of £650 even though Carer’s Allowance is the lowest benefit of its kind at only £69.70 per week and won’t even get an extra £150 alongside people who are in receipt of disability benefits.
“Our research, Under Pressure, has found that many carers face additional costs because of caring such as transport, doing extra laundry and technology to help manage caring. These carers will be left wondering how they will face these extra costs as prices continue to rise.
“It’s not as simple as finding extra paid work to help meet extra costs when it’s impossible to cut back any further. Many are providing significant amounts of care and just can’t get an extra job. Many have already given up work to care.
“For months Carers UK and others have been drawing the Government’s attention to the extreme challenges that carers are facing with their finances, as well as the lack of financial support carers have received in their own right since the start of the pandemic.
“People in receipt of Carer’s Allowance were overlooked for the £20 a week additional payment that Universal Credit recipients received from March 2020 until last Autumn, meaning carers lost out on over £1000 a year for two years in a row.
“Carers in receipt of Carer’s Allowance have been contacting us at their wits end in recent months, with many telling us they are having to get further into debt, use food banks and credit cards, or cut back on heating and energy bills to ensure they can remain solvent.
“Today’s announcement for this overlooked group of carers is not enough to reduce the worry and financial stress in the weeks and months ahead and it makes them feel even less valued.
“Carers continue to provide unpaid care worth £530m per day – with a combined total since March 2020 of over £400 billion.
“Many of these people have had to make huge sacrifices to do so, including giving up their paid jobs.”
Carers Trust’s Chief Executive Officer, Kirsty McHugh, said: “We welcome, of course, the additional financial support for low-income households, including extra cost of living support for those on disability benefits.
“But we are extremely disappointed to learn that unpaid carers have been shut out of additional support yet again with Carer’s Allowance excluded from the benefits listed as qualifying for the extra £650 one-off payment for those in greatest need.
“Many of the UK’s seven million unpaid family carers bore the brunt of the pandemic. And before that were already experiencing a cost-of-living crisis because more than half of them had had to give up paid work because of their caring role.
“Now millions of those unpaid carers on Carer’s Allowance who were already experiencing acute financial hardship have been forgotten yet again by the Government, with only those on means tested benefits like Universal Credit qualifying for the additional £650 payment.
“The UK Government needs to urgently follow the example of the governments in Wales and Scotland. They have targeted unpaid carers who receive Carer’s Allowance there with extra financial support to recognise how their vital caring roles have all too often pushed them into financial hardship.
“We also call on the UK Government to identify unpaid carers as a priority group in its guidance on new funding for local authorities on the Household Support Fund.
“For millions of unpaid carers, the support announced today will do little more than mitigate new pressures, rather than tackle pre-existing problems.
“It’s way past time for the UK Government to stop ignoring unpaid carers on Carer’s Allowance, and instead make them a priority group for the extra financial support they so desperately need, and deserve.”
Amanda Batten, CEO at Contact, said: “We are pleased that the Chancellor has finally acknowledged the extra costs facing households due disability such as those who rely on life-saving equipment.
“We would like to thank all our supporters and charity partners for backing our Out of Energy campaign that called on government to give more financial help to disabled households.
“Calls to our helpline have become increasingly desperate over recent months as the cost of living crisis hits disabled households the hardest. The measures announced today should give families some respite.
“However, we know that many families still face a worrying time as prices continue to rise.
“We will look at the measures announced today in more detail and continue to campaign for better financial support for families with disabled children.”