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Cost of Living: Means-tested Benefit Claimants

Volume 737: debated on Monday 4 September 2023

3. What steps his Department is taking to help claimants in receipt of means-tested benefits with increases in the cost of living. (906145)

The Government recognise the pressures people are facing and we have acted. We are providing cost of living support worth over £94 billion between 2022 and 2024 to help households and individuals with those rising costs. That includes cost of living payments totalling up to £900 in 2023-24 for over 8 million households on eligible means-tested benefits. We successfully delivered the first payment of £301 to 8.3 million households earlier this year, and the second payment of £300 will be paid in the autumn.

The Government are indeed giving generous cost of living support to households on certain means-tested benefits this winter, but if someone is on one of those means-tested benefits and they earn £1 more, they have the potential to lose the full payment. I wonder if the Minister has noticed any change in people’s behaviour as a result of that disincentive to take on extra work.

It is vital that those on low incomes, or indeed those who are keen to work more, see the incentives. In the spring Budget, we announced an ambitious package of measures to support people to take up work and, importantly, to progress by making sure that they are always better off. We are also supporting them with a significant investment in childcare and, of course, the largest ever cash increase to the national living wage, taking it up to £10.42. I would say to those people that they should look at the benefits calculator on, because they will always be better off in work.

Rents have risen very sharply over the past couple of years, but the support for people claiming means-tested benefits to pay their rent, determined by local housing allowance, has not changed at all since 2020—it has been completely frozen. I wrote to the Secretary of State about this over the summer. Is the Minister able to give the House any assurance that the forthcoming benefit uprating statement will include a realistic increase in local housing allowance?

I know that the right hon. Gentleman is very interested in this subject, as am I. Again, there is help for households, with the local housing allowance rate being set at the 30th percentile in 2020. The Government are projected to spend around £31 billion, or around 1.2% of GDP, on support for renters in 2023-24. It is absolutely right that we support people to be better off. The LHA is not intended to cover all rents in all areas, but I take a close interest in this subject.