Universal Credit claimants could get extra £700 cash boost to fight ‘worst of inflation’

Simon Clarke grilled on return of Universal Credit uplift

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The Centre for Social Justice (CSJ) has published three different recommendations the Government could adopt to increase benefit payments for those who are most in need. This comes as inflation hit a 40-year high of nine percent last week with many recipients of benefit payments set to struggle in the coming months. The UK Government is being called to do more to assist those in need of support, including those on Universal Credit.

One of the options put forward by the CSJ is raising benefits from the Department for Work and Pensions (DWP) as if they had been given a 10 percent increase in April 2022.

Last month, benefit payments were hiked 3.1 percent in line with last year’s Consumer Price Index (CPI) rate of inflation.

Adopting this position would result in 4.2 million households getting an average of £729 a year or an extra £60 a month.

However, the think tank acknowledges that this would cost the Government around £3.1billion.

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Alternatively, the CSJ suggests that the £20 uplift to Universal Credit payments could be reintroduced.

During the pandemic, the Government rolled out this extra support to claimants of the benefit payment which saw an extra £1,000 a year given to those on Universal Credit.

At the time, the Chancellor Rishi Sunak made clear this would only be a temporary measure and bringing it back would cost the taxpayer £4.2billion, according to the CSJ.

The think tank believes the £729 hike to benefit payments would be ideal as “this lowers the cost to the Treasury, if this is a concern – it is a sensible alternative to restoring the £20 uplift”.

Another recommendation is to restore work allowances to 2015 levels, which could see households acquire an extra £442 per year.

Recently, the Government has introduced schemes such as the council tax rebate and increased financial support to the discretionary bid in a bid to mitigate the impact of inflation.

Research from the Institute for Fiscal Studies (IFS) suggests that lower income households could see hit inflation reach 10.9 percent.

This is because poorer Britons are more likely to spend their hard earned cash on heating and lighting their homes.

As well as this, energy bills are set to go up by £693 this year after last month’s hike to the price cap.

Further increases to gas and electricity bills are expected to take place towards the end of the year.

Sir Iain Duncan Smith MP, the founder of the Centre for Social Justice, is urging the Government to listen to the group’s proposals as the pressures of inflation continue to harm everyday households.

The former Conservative Party leader explained: “The CSJ is calling for a special fiscal event to tackle this crisis, and to provide a shield against the worst of inflation for those most struggling.

“Rebates and discretionary funds represent a step in the wrong direction for tackling poverty. Universal Credit links benefits to work, ensuring those that are able can move into and progress within employment.

“With Universal Credit only uprated by 3.1 percent in April, those who rely on welfare for their income will experience a seven percent cut.

“To prevent this, the Chancellor and Secretary of State for Work and Pensions should implement an emergency in-year uprating, bringing Universal Credit into line with inflation to ensure it covers the true cost of living.”

A Government spokesperson said: “We recognise the pressures on the cost of living and we are doing what we can to help, including spending £22billion across the next financial year to support people with energy bills and cut fuel duty.

“For the hardest hit, we’re putting an average of £1,000 more per year into the pockets of working families on Universal Credit, have boosted the minimum wage by more than £1,000 a year for full-time workers and our Household Support Fund is there to help with the cost of everyday essentials.

“We also know that people are at least £6,000 better off in full time work than on benefits, so we are redoubling our efforts to help people find work and progress.”

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