CAB Response to proposed cuts to universal benefits

The Coalition Government is considering cuts to both Child Benefit and the Winter Fuel Payment.  While no firm decisions have yet been made on restricting these benefits the plans being considered by the Government include limiting these payments to the less well-off.

Child Benefit and the Winter Fuel Payment are currently universal benefits in that they are not means tested.  Child Benefit is paid to a person who is responsible for a child or young person and is paid at the rate of £20.30 a week for the first child and £13.40 for every other child.  The Winter Fuel Payment is paid those aged 60 or over in order to help them pay for their heating over the winter. Last year the Winter Fuel Payment was £250 per household and £400 for those over 80.

Citizens Advice is concerned with any plans which would introduce complexity to these benefits.  The fact that they are univeral means that they are easy and cost effective to administer and have a high take-up rate.  The take-up rate for Child Benefit is 97% while the take-up rate for Child Tax Credit (CTC), which is the nearest means-tested benefit to Child Benefit, is only around 80%.

Once means testing is introduced complexity is introduced into the system meaning that people would then be required to complete claim forms, a new IT system would have to be introduced to manage the process and the Government would have to recruit more staff to administer the benefits.  Citizens Advice questions if introducing means-testing would actually result in the savings the Government is trying to make.

Siobhán Harding, Information & Policy Officer with Citizens Advice said:  "For most of our clients the receipt of Child Benefit and the Winter Fuel Payment are essential parts of their income and something they simply could not do without.  These payments are vital to their household budgets and are key benefits in tackling poverty among the vulnerable, particularly in the current economic climate."

CAB Advisers and Managers are very aware of how vital the Winter Fuel Payment is to many of our clients.  Our advisers see many vulnerable older people who often struggle to afford to put their heating on.  Many of our older clients are living on very low incomes and given the rising costs of fuel, a trend that is likely to continue, and the severity of last winter rely on their Winter Fuel Payment to enable them to turn their heat on.

Click here to listen to Siobhán Hardings interview on Evening Extra on this subject (1.08mins).