The Department for Work and Pensions (DWP) has announced when it will next review benefit levels. It will be deciding on the increase for claimants that will take affect in April 2023. But, the date it has set is not soon enough. And, moreover, the DWP could do something now if it wanted.
DWP annual benefits review
The DWP revealed the time of the review in response to a question. Lib Dem MP Wendy Chamberlain asked the department:
what factors her [Coffey’s] Department will take into account when it next makes an assessment of the potential merits uprating of benefits; and whether the energy price cap will be taken into account when making that assessment.
DWP minister David Rutley said that his boss Thérèse Coffey:
is required to undertake an annual statutory review of benefits and pensions. She uses the Consumer Prices Index (CPI) in the year to September to measure inflation and average weekly earnings for the period May to July to measure earnings. The Office for National Statistics publish these figures in October.
[She] must increase certain benefits by at least the increase in prices or earnings. If she considers it appropriate, having regard to the national economic situation and any other matters which she considers relevant, she may increase others by such a percentage(s) as she thinks fit.
Her review will commence in the autumn and her decisions will be announced to Parliament in November in the normal way.
So, what does this mean in reality for social security claimants?
Chaos for DWP claimants
On the face of it, if Coffey is basing her November decision on September’s inflation, then the increase in social security rates may be larger than usual. This is because the Bank of England says inflation will continue to rise this year. It may even hit 10%. However, while this may seem like an improvement for social security claimants, this is not actually the case.
Think tank the Resolution Foundation previously said that the poorest people would see falls in income in the majority of years until 2026/27. As The Canary previously reported, with an 8.3% inflation rate April’s social security increases were going to mean a real-terms cut to people’s money. This would have taken rates to their lowest level since the mid-1980s. Now, with inflation actually standing at 9.4%, the situation for millions of people will be even worse.
In practice, even a 10% rise in social security rates in 2023 would barely make up for the real-terms cut in 2022. On top of this, the DWP has made claimants suffer years of benefit freezes. So, Coffey merely following procedure would still leave claimants in a disastrous situation.
Failing to act
Of course, the DWP can do what it wants with social security rates. As The Canary previously reported, Coffey could change the controversial benefit cap whenever she wanted. Moreover, as we saw with the £20 Universal Credit uplift during the coronavirus (COVID-19) pandemic, Coffey can do the same for all social security – but she chooses not to.
The poorest people are already in a dire position. The DWP saying that it will review social security rates in November will not improve things. Only a realistic assessment of the situation followed by an immediate increase in the rate will avoid further disaster.
Featured image via The Canary and Wikimedia
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