DWP's response to the coronavirus outbreak Contents

3Legacy benefits

50.On 20 March, in response to the coronavirus pandemic, the Chancellor announced that the Universal Credit standard allowance would increase by about £1,000 per year (£20 per week) for the following 12 months. He also announced that the basic element of Working Tax Credit would increase by the same amount and for the same period. Local Housing Allowance was also increased to pay for 30% of market rents in each area.45 He did not, however, announce any increase to other benefits, including those which support disabled people. These benefits are also known as ‘legacy benefits’.

51.According to analysis by the Social Metrics Commission, which measures poverty in the UK, nearly half of people in poverty (48% - 6.8 million people) live in a family that includes someone who is disabled.46 More than four in ten people (41%) living in a family that includes both a disabled adult and child are living in poverty.47 Our predecessor Committee’s inquiry into the Welfare Safety Net heard evidence that this is because of the inescapable costs disabled people face which increase their cost of living. These might include the costs of extra support and help with daily living, meeting mobility needs, or increased costs for basic essentials like fuel, food or housing.48

Impact of coronavirus

52.Loss in income has left many people struggling to cover the basic costs of food and bills. The Food Foundation has found that more than three million people reported going hungry in the first three weeks of the lockdown. In a poll commissioned by the Food Foundation, 7.1 million people said that someone in their household has had to reduce or skip meals because they could not access or afford sufficient sustenance.49 The Trussell Trust reported an 89% increase in distribution of emergency food parcels from food banks in its network during April 2020, compared to the same period in 2019. This includes a 107% rise in parcels given to children. The number of families with children receiving parcels has almost doubled compared to the same period last year. Food banks in the Independent Food Aid Network (IFAN) reported a 175% increase in need during the same period.50

53.We have heard that coronavirus has increased daily costs for disabled people already struggling to make ends meet. Since the lockdown began on 26 March, many have had to change care arrangements, switch to online deliveries for essentials, start to pay for Personal Protective Equipment and supply cleaning products to protect their carers.51 Of 224 disabled people surveyed for a week in mid-April, the Disability Benefits Consortium reported that 95 per cent saw costs rise for food, utilities and managing their health. All extra costs resulted directly from the Covid-19 emergency.52

54.Our own survey of people claiming benefits—which was not based on a representative sample—heard personal stories about the increased costs that people were facing. One person told us:

“Being severely disabled I’m unable to cook for myself and cannot go to my mum’s for meals and support. I’m having to survive on snacks and cold food because I cannot cook. These things are more expensive than being able to get help from my family.”53

Another person said:

Food and other household goods have gone up in price or I can’t buy the cheaper options I normally get, so the money I get isn’t going far enough. I’m having to spend a lot of money on cleaning products and PPE for my carers as I’m in the extremely vulnerable category.54

Another said that they found it hard to understand why the rates of some benefits, but not others, had been increased. They wrote:

The £20 weekly increase given to Universal Credit claimants, would massively help to offset my increased costs, but it has not been offered to those on legacy benefits. Why are those on legacy benefits being discriminated against?

55.Unpaid carers of disabled people who have lost income due to the outbreak also responded to our survey and described the impact on their lives. One parent told us:

“Our daughter is 14 and has special educational needs. With school closed, and our self employed work shut down, we are now on full time care for her, we should be entitled to claim Carers allowance however if we do this it transfers us from child & working tax credit on to universal credit and we end up losing more than we gain by claiming Carers allowance. It feels like we’re being punished for filling the gap in care for our daughter.”55

The Motor Neurone Disease Association emphasised this point in written evidence to the Committee, saying:

We would also reiterate that the amount of financial support through Carers Allowance is not enough, especially at a time when now more than ever extra pressure is being placed on unpaid family carers.56

56.Support organisations and charities told us that legacy benefits should be increased by the same amount as Universal Credit and Working Tax Credits during the pandemic. The Child Poverty Action Group, Citizens Advice and the Trussell Trust all called for an uplift to legacy benefits that matches the increase applied to Universal Credit.57 Scope, a disability charity, argued that: “It is unfair that UC claimants have received an increase in their benefit rate whilst those on legacy benefits such as ESA have not. Legacy benefit claimants have just as much of a need for a benefit uprating as those who claim UC.”58 Some disabled legacy benefit claimants will also be unable to benefit from the uprating to Universal Credit because they are prevented from moving by the Severe Disability Gateway. If they were to move to UC, they would lose substantial sums of money.

57.The Secretary of State, Rt Hon Dr Thérèse Coffey, told us in March that, in response to the coronavirus pandemic, the Department’s priority had been to focus on new claimants who were “coming into the process for the first time” and to ensure that they received the support to which they were entitled.59 The vast majority of these new claimants were claiming Universal Credit. She told the House on 4 May that it is operationally difficult for DWP to make changes to the rates at which legacy benefits are paid, and said that preparations “tend to happen four or five months before the actual changes come through, because that is how long it takes our computer systems to work.”60

58.When questioned about whether disability benefits such as PIP and ESA should be increased during the coronavirus pandemic, the Minister for Disabled People, Health and Work, Justin Tomlinson MP, told us that:

The disability benefits are society’s contribution towards the extra costs they may incur through their disability or long-term health conditions. Rightly, they were increased by 1.7% on 6 April as part of the normal budget.61

This 1.7% increase was, however, simply the standard annual uprating in line with inflation. It marked the end of the benefit freeze which had applied to most working age benefits since 2016. It was announced in November 2019: that is, before the coronavirus pandemic, and not in response to it. Moreover, both Universal Credit and Working Tax Credits were also uprated by 1.7%, in addition to the coronavirus-specific uplifts announced by the Chancellor.

59.The Social Security Advisory Committee (SSAC), an independent statutory body which advises the Secretary of State on social security and related matters, wrote to the Secretary of State on 27 May. In that letter, SSAC noted that the increases in Universal Credit and Working Tax Credit had been of “significant help to millions of low-income families”. It noted that the Government had been “focusing on delivering changes that could be operationalised quickly”, and said that it had been advised that “uprating of ESA and JSA could not be achieved quickly or safely as there was a well-established uprating cycle for legacy benefits, as well as serious IT challenges to overcome.” Nevertheless, SSAC concluded that:

While we understand the reasons for not including ESA and JSA in the original announcement, we are of the strong view that it is increasingly untenable for this group of claimants to be excluded and to continue to have a lower level of income than those in receipt of Universal Credit and Working Tax Credit.

60.It recommended that the Government should find a way “to ensure that this group of claimants, that includes some of the least well off” could be “brought up to the same level as those in receipt of Universal Credit as soon as it is possible to do so.” It added that: “On grounds of equity, consideration should be given to backdating that uplift to 6 April 2020.”62

61.It was right that the Department, in the initial phase of the crisis, focussed on increasing the rates of Universal Credit and Working Tax Credit. Those changes could be made relatively easily and enabled the Government to get support quickly to millions of people. But that does not mean that the Government should simply ignore the needs of those people who are claiming—through no fault of their own—benefits which rely on outdated and complex administrative systems. Those benefits include support for disabled people, people with health conditions, for carers, and for people with children. Even if it takes the Department several months to make the changes, that would still be better than offering no additional support at all.

62.We recommend that, now that the initial surge of Universal Credit claims has mostly been handled, the Department should immediately seek to increase the rates of relevant legacy benefits by the equivalent amount. This increase should be backdated to April 2020, as recommended by the independent Social Security Advisory Committee.

63.People will be claiming legacy benefits until at least September 2024, the Government’s most recent estimate for completing the rollout of Universal Credit. It is simply not tenable for the Department to continue to operate antiquated systems that prevent Ministers from making timely changes to the rates at which legacy benefits are paid. We recommend that the Department work to increase the speed with which changes can be made to legacy benefit rates.

45 HM Treasury, ‘Chancellor announces workers’ support package’, accessed 28 May 2020

46 Social Metrics Commission, Measuring Poverty, July 2019, p.5

47 Social Metrics Commission, Measuring Poverty, July 2019, p.28

48 Work and Pensions Committee, Twenty Eighth Report of Session 201719, Welfare Safety Net, HC1539

56 Motor Neurone Disease Association (SWP0063)

58 Scope (SWP0068)

60 HC Deb, 4 May 2020, col 425

62 Department for Work and Pensions, ‘Covid 19 SSAC letter to the Secretary of State’, accessed 1 June 2020

Published: 22 June 2020