DWP issues new update on PIP cost of living payments and says 'it is right'

The Department for Work and Pensions has issued a new update on PIP cost of living payments after concerns were raised over the financial impact on disabled people. During 2023-2024, around six million people on disability benefits received £150, following a similar amount handed out the previous year.

To qualify, people needed to be in receipt of Personal Independence Payment (PIP), Disability Living Allowance (DLA), Attendance Allowance, Armed Forces Independence Payment, War Pension Mobility Supplement, or Scotland's separate Adult Disability Payment and Child Disability Payment.

Navendru Mishra, Labour MP for Stockport, asked the DWP what estimate had been made of the average financial impact per claimant of discontinuing the disability cost of living payments. The only cost of living support for the 2024-2025 year so far is the DWP's allocation of extra cash to Household Support Fund schemes run by local councils, enabling them to provide assistance to low-income families for another six months.

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In response to Mr Mishra's question, Mims Davies, Minister for Disabled People, Health and Work, said: "No estimate has been made about the discontinuation of Disability Cost of Living Payments. As of April 2024, the rate of inflation has slowed, and the Government has also implemented uprating to benefits to reflect increased costs. We also increased extra costs disability benefits by 10.1% from April 2023 and by 6.7% from April 2024 in line with the Consumer Price Index."

She added that many recipients of the £150 disability payments were on other benefits as well, which meant they had also qualified for other cost of living schemes on top. She explained: "For 2023/24 we estimate that nearly 60 per cent of individuals who received an extra costs disability benefit would have received the means-tested benefit Cost of Living Payments, worth up to £900. Over 85 per cent would have received either or both of the means-tested and the £300 Pensioner Cost of Living Payment.

"An evaluation of the cost of living payments is underway. This will seek to understand their effectiveness as a means of support for low-income and vulnerable households."

When Mr Mishra raised similar issues earlier in April, Ms Davies had also clarified: "The Government has no plans to extend the disability cost of living payments past the 2023/24 round. Cost of living payments enabled us to target further support quickly during the rising cost of living pressures."

The Work and Pensions Committee has also expressed concern about the level of support provided to vulnerable groups during the cost of living crisis. The committee said in a report: "The cost of living payments do not provide a suitable level of support for vulnerable groups who are impacted to a greater extent by the cost of living crisis, such as those with disabilities, and do not cover the additional costs these people face. This is especially true if those who receive the £150 cost of living payment are not entitled to any of the other cost of living payments.

"We have not seen an adequate explanation for how £150 was determined as a suitable bridging payment for those with disabilities. The Government should set out a detailed reasoning as to why a payment of this size was considered correct.

"Should there be future cost of living payments, or similar ad hoc support, the Government should increase the financial support for those with disabilities in proportion to the additional costs that they incur."

The Government responded to that recommendation by saying: "In setting the level of the cost of living payments, the Government believes that it is right that the highest amount goes to those on means-tested benefits as those on the lowest incomes will be most vulnerable to rises in the cost of living."

The questions over PIP support come amid plans for a major shake-up of the benefit which could see payments stopped. Proposals in a new Modernising Support Green Paper include changing the eligibility criteria and qualifying period; reforming assessments so they are more closely linked to a person's condition and potentially bypassed entirely for those most in need; and moving away from a fixed cash system to alternatives including vouchers, catalogues and grants for treatment, appliances and equipment.

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