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Cost of living payments should be spread out over winter, say MPs

Britain's chancellor Jeremy Hunt has been tasked with helping with the cost of living
Cost of living: In his autumn statement, chancellor Jeremy Hunt announced that payments of up to £900 would be given to those on means-tested benefits in 2023-24. Photo: AP Photo/Kin Cheung (ASSOCIATED PRESS)

The Treasury Committee has urged for cost of living support payments to be spread out over next winter to people on means-tested benefits.

In last month’s autumn statement, chancellor Jeremy Hunt announced that payments of up to £900 would be given to those on means-tested benefits in 2023-24, building on the support which has already been made available this year.

However, the committee said on Wednesday that these payments should be spread across the winter period, with a payment each month for six months.

Read more: UK wages fall by 2.7% as unemployment rises

The committee also criticised the “cliff-edges” formed as a result of the support, where those who earn just one pound too much, or become eligible for a benefit a day too late, receive no support.

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“This has consequences for fairness and work incentives,” it said.

The UK government has previously said there will be more than one payment, with further details will be given in due course.

But the report highlighted that as support is the same for all recipients, rather than being tapered off as an individual’s income increases, households face missing out if they increase their income through additional work.

Watch: How to prevent getting into debt

The MPs pointed out that many who require support may not receive it, because they do not receive a means-tested benefit when the assessment for the support payment takes place.

For example, an individual who is made redundant may become eligible for a means-tested benefit, but not for the support, if they lost their job outside of the assessment period for cost of living support.

It is calling for smaller, more regular support payments to be made, with more frequent assessment periods, in order to smooth these cliff-edges.

Similar cliff-edges also prevent some low-income families from accessing legal aid and free school meals.

Read more: UK economy returned to growth in October with 0.5% rise in GDP

“As winter draws in and temperatures drop, many will be worrying about the cost of their energy and heating bills,” Harriett Baldwin, chair of the Treasury Committee, said:

“Alongside the support already provided this year, the chancellor has told us that further cost-of-living assistance will be available next winter to recipients of means-tested benefits.

“This runs the risk of creating perverse cliff-edges and eroding work incentives, and our cross-party committee is proposing a way of mitigating these risks.”

Watch: How to save money on a low income