The government is being urged to bring forward increases in benefits and the state pension which are planned to start in April 2023.
The benefit increase set for next year will keep pace with inflation projected for September 2022, but is to be paid in seven months later.
State benefits are increased every April in line with the rate of inflation recorded in the previous September, meaning that they increased 3.1 per cent this April in line with the inflation rate from September 2021.
Yet, inflation since then has gone up to nine per cent as of April 2022, meaning that state benefits are currently lagging, and claimants are feeling the financial squeeze.
Charities have therefore called on ministers to increase benefits now as the cost-of-living crisis begins to bite, with energy bills rising at an unprecedented level from last month when the energy price cap was raised.
The Treasury, however, says that making payments earlier would be impeded by technical issues.
Chancellor Rishi Sunak has said that the complexity of the welfare systems makes it a technical challenge to increase and pay out legacy benefits prior to April, whereas Universal Credit payments could be adjusted more quickly and easily.
Citizens Advice called on the government in April to raise benefits in line with the current inflation rate, but this has not happened and the Treasury has no plans as things stand to bring the rises forward.
Pointing out support that the government had already provided, a Treasury spokesperson said: “We understand that people are struggling with rising prices, and while we can't shield everyone from the global challenges we face, we are supporting British families to navigate the months ahead with a £22 billion package of support.
“That includes saving the typical employee over £330 a year through a tax cut in July, allowing people on the universal credit taper rate to help people keep more of the money they earn - benefiting over a million families by around £1,000 a year, and providing millions of households with up to £350 each to help with rising energy bills.”
Yet, with inflation forecasts as they are currently, benefits and the state pension could increase by near 10 per cent next April, and charities are stressing that this could make a major difference to people if brought forward to now, rather than letting people pay more with less money and receive greater incomes in 11 months.
Michael Clarke from the Turn2us charity, commented: “Intervention is urgently needed to catch people before they fall into crisis in the months to come because our social security system should be able to provide the protection to weather this storm.
“The government must act as a matter of priority and ensure that as a minimum, benefit levels are increased to meet the true cost-of-living and they assess their own practices of benefit deductions so that money is not taken away from people at a time where they need it most.”
Robert Joyce, deputy director at the Institute for Fiscal Studies [IFS], said that technical issues was not a viable excuse for the government to wait.
He said: “Even if they need a few months' notice, that is better than waiting another year.
“There is pressure on the government to fast-track the rise. There has been a reluctance to do something so far.”
The IFS is one of several leading think tanks which has said that bringing the benefit and pension hikes forward would not have a major adverse effect on the public purse nor the £250 billion welfare bill.
Karl Handscomb, senior economist at the Resolution Foundation, added that it was a “recipe for more debt” for claimants to be left waiting until April 2023 and that the government could process higher payments before the next energy price rise in October if they were to “get started now”.
Photo by Sarah Agnew on Unsplash
