DWP admits cost of living payments failed to properly support disabled people

Chronically ill and disabled Universal Credit claimants saw their health deteriorate across the course of 2023 – despite receiving the former Conservative government’s flagship cost of living payments. In other words, the extra payment failed to enable recipients to maintain their health amidst the spiralling rise in living expenses.

Crucially, the Department for Work and Pension’s (DWP) own report has confirmed what we already knew – that the additional payments didn’t “scratch the surface” of chronically ill and disabled claimants’ financial struggles.

Cost of living payments: controversial from the start

Between 2022 and 2024, the Conservative government awarded two rounds of cost of living payments to some benefits claimants. However, the Canary’s Steve Topple calculated at the time that the DWP was denying these to around 1.6 million people. Notably, this included many chronically ill and disabled people.

This is because the DWP didn’t include certain benefits in its eligibility criteria for them. Among those it excluded were disability benefits such as Personal Independence Payment (PIP) and Disability Living Allowance (DLA). The government made it so contributory or new-style Employment and Support Allowance (ESA) also didn’t qualify for the payment.

Instead, the government made a one-off £150 lump sum to people claiming disability benefits such as PIP and DLA. It paid this out in April 2023. At the time, many were raising the alarm bells over this woefully insufficient offering.

Now, the DWP’s own report confirms what the Canary and others had been saying all along. That is, that the paltry payment didn’t make a dent in chronically ill and disabled people’s expenses under the soaring cost of utilities and essentials.

Failing chronically ill and disabled people from the get-go

The Conservative government originally launched a review into the cost of living payments in late 2023. The DWP has now published this. And the results are about what you might expect.

The evaluation surveyed claimants receiving the most recent round of payments. This covered the department giving people £900, split into three payments across 2023, and early 2024. It paid the first one in April 2023, the second payment of £300 in October/November that year, and the third payment of £299 in February 2024. For this cohort, it attained 2,608 survey responses in total.

On top of this, it evaluated the impacts of the pensioner cost of living payment. In particular, it gave this to pensioners that received the Winter Fuel Payment (WFP). It increased £200/300 payments to £500 for households with a resident of State Pension age. For households with a resident over 80, it went up to £600. In this instance, 1,022 pensioners responded to the survey.

It also reviewed the so-called disability cost of living payment. There were 881 responses for this group. Needless to say, this one-off payment was a drop in the ocean to chronically ill and disabled claimants.

Recipients of the ‘disability’ cost of living payment described its impact:

as minimal. They felt that £150 was not enough to make a difference to the cost of living pressures they were facing

Of course, this is likely because the small one-off lump sum paled in comparison to the soaring cost of living. That’s not even to mention that majority of disabled claimant recipients had significant additional health-related expenses. The review found this to be the case in 68% of the people it surveyed over the payment.

So it’s little wonder that one recipient summed up the situation saying:

It didn’t really scratch the surface of what we have to pay. It just kind of disappeared in the bank account, really.

Not a lot better for disabled people that did get it

However, as it turns out, the cost of living payment didn’t do a lot of good for those that got it either. Even for chronically ill and disabled people the DWP did give the main cost of living payment to, it was little more than a short-lived stopgap measure.

Notably, disabled claimants comprised 63% of the survey’s main cost of living payment recipients. So to start, the report identified how these disabled recipients had additional health-related expenses for things like medical costs, transport, and aids.

Then, it noted how disabled recipients had:

increasingly struggled to meet those expenses.

For the core cost of living payment recipients, 43% had expressed how the rising prices of living essentials had meant their extra health-related costs:

had become a lot harder to afford over the last year.

In other words, spiralling prices of goods and services was eating up money that chronically ill and disabled people might have directed towards managing and living with their conditions. Only just over half (54%) of disabled cost of living recipients were able to spend any of their payment on their health needs.

To make matters worse, chronically ill and disabled recipients already had higher costs to contend with in the first place. Predictably then, the report said that recipients:

who had additional health-related expenses were more likely to feel that energy bills, food, and other bills had become more difficult to afford over the last year, compared to those without additional health-related expenses.

Obviously, the increased costs of living essentials had therefore hit chronically ill and disabled people harder. The report acknowledged this further, stating that:

Qualitative interviews revealed that health needs could also lead to higher costs. For example, recipients noticed a significant increase in energy and utility bills driven by using more electricity for medical equipment like mobility scooters and oxygen containers. Participants also needed to keep the heating on for longer to manage conditions like arthritis, as colder temperatures would aggravate the pain. This was also true for older participants who kept their heating on to support their mobility.

Health actually got worse

Crucially though, the survey followed up with recipients after the cost of living payments. This revealed that the DWP’s three the cost of living payments had made no difference to them being able to cover their health-related expenses. Instead, it found that:

a large proportion of recipients continued to find health-related expenses difficult to afford.

Most significantly however, the follow-up highlighted how:

participants experienced a deterioration in their physical health over the course of the study.

To sum up: the health of chronically ill and disabled recipients of the £900 cost of living payment had actually got worse during the period the DWP had paid this out.

Of course, this also impacted family members acting as carers for their chronically ill and disabled loved ones. Specifically, it detailed that it had exacerbated their mental health due to the:

compounding pressure of additional caring duties and the need to work more hours to meet rising costs.

This on top of the fact that people claiming Carer’s Allowance were also ineligible for the payment only makes that all the worse too.

Not able to afford the things they need to live

The report skirted around offering an explanation for this, noting only that:

This decline was attributed to either worsening pre-existing health conditions or diagnoses of new conditions. Participants noted that their declining health led to additional expenses, such as the cost of taxis to attend frequent hospital appointments.

However, it’s not hard to put two and two together. It should be obvious that not being able to afford a) essentials, and b) extra health costs (arguably also essentials) would cause people’s health to decline.

Other parts of the report underscored this too, if not directly drawing the explicit connection.

For instance, the evaluation categorised cost of living recipients into one of three groups according to their financial circumstances.

Predictably then, group C – the one least able to afford everyday essentials – were the cost of living recipients more likely to have additional expenses. It made up the bulk, at 46% of survey respondents. These included extra costs for things like rent, debt, childcare, and school expenses. And naturally, healthcare costs came into this too.

Specifically, 59% of this group had added healthcare-related spending. This compared to 45% for group A – comprising 22% of recipients –  who were those that could most afford the increased cost of living.

It tracks too then that proportionally, more in group C actually reported that their financial situation had gotten worse. This was at more than four times the rate – 42% – to 10% of group A respondents. Given there were significantly more people in group C, that also means many more people who’d already been struggling to make ends meet, now found themselves worse off despite the cost of living payments.

In other words, the cost of living payments were worth a lot less in practical terms, and had a much smaller impact for the poorest, most marginalised claimants.

Majority of claimants *already* living in poverty

Largely though, it showed that chronically ill and disabled claimants were also more likely to have multiple expense pressures at once. This would have compounded the impact of rising bills and costs for these recipients, ultimately further eroding the payment’s impact in alleviating them.

But perhaps most significantly, nearly three-quarters of the survey respondents were living in absolute poverty. For the analysis, this equated to a dual household (minus children) with a weekly pre-tax income below £368. Of course, this rate varied according to the composition of the household.

The evaluation didn’t identify the number of disabled recipients living in absolute poverty. However, given the fact that 63% of respondents were disabled, it means that disabled recipients would have made up a significant proportion of the near three-quarters in absolute poverty.

With substantial numbers of recipients starting out in absolute poverty – it’s little wonder the cost of living payment hardly made a dent. In other words, claimants were already living on paltry, inadequate incomes.

And the fact that the majority of cost of living recipients were poor, is even less surprising when you factor in rates of employment in the survey pool. This was just 26% of claimants getting the cost of living payment in the survey. Plus, group C respondents were more likely to be employed.

In short then, this means that for most recipients, Universal Credit would have been a major source of their income. Yet, successive governments have ensured that benefits are not enough for people to live on.

Falling far short without real-terms raises

In part, this is because they’ve repeatedly failed to raise benefits in line with inflation.

As Topple has also pointed out, the Universal Credit ‘increases’ in 2023 were in fact real-terms cuts. It meant that claimants were in fact worse off than before the Coronavirus pandemic.

Unsurprisingly, those losing out from the flat-rate payment as opposed to the DWP actually uprating Universal Credit in line with inflation included families with three or more children, and some households with disabled residents.

Low and behold then that the evaluation also identified that recipients of households with three or more children were both:

• More likely to need to borrow money to afford essentials (66% of single households, 57% with two or more adults). This compared to 60% and 50% with one to two children, and 38% and 36% with no children respectively.
• And to have used their cost of living payments within a week of receiving it. This was the case for 57% of single parents, and 42% for households of two or more adults. Again, this compared to just 37% and 36% in one to two child households, and 22% for both without children.
• Additionally, single parents more frequently reported that energy bills had become much harder to afford. Specifically, they did so 60% of the time, compared to 45% of single adults without children.

Notably, this also meant that single mothers were particularly underserved by the cost of living payments. This is because they made up 94% of the single parents in the survey.

In short then, the soaring costs of bills and essentials were still a disaster for women, children, and disabled Universal Credit claimants. This was the case even with the extra £900 cost of living payments.

A sticking plaster, not a solution

Overall, the report found that the cost of living payments’ impact was temporary for all recipients. It drove home that while they initially helped:

recipients to avoid taking on additional debt and had a notable short-term impact, these positive financial effects were typically temporary. By the end of the next month, recipients were facing the same financial challenges again

Ultimately then, the fact is, the cost of living payments were merely a sticking plaster. Crucially, they didn’t even take claimants back to the starting line in terms of meeting the soaring costs of everyday living necessities.

So not only did the DWP leave vast numbers of chronically ill and disabled people without this support, the ones it did provide it to, it utterly failed anyway.

Of course, the former Conservative government stopped this payment in February 2024. It’s extremely unlikely the new Labour government will now look to reinstate this in any form. In short: the DWP hasn’t published this now with any intention to build an improved and more inclusive scheme.

Quite the opposite in fact. On Wednesday 29 January, chancellor Rachel Reeves will instead set out the government’s new plans to cut people’s benefits. Not to mention that this will finally reveal what Labour intends to do with disability benefits specifically. It’s looking likely this will involve denying these benefits to many people needing them going forward.

So there’s fat chance the Labour-led DWP is going to heed the evaluation’s findings and make welfare genuinely meet chronically ill and disabled people’s needs. Because, why on Earth would it want to do that? Not when it can scapegoat them for the problems of its own design instead.

Featured image via the Canary