Parliamentary Committees and Public Enquiries
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Government commits to improving communication around Basic Income Pilot and Pension Credit following recommendations from the Welsh Affairs Committee

In response to the Welsh Affairs Committee’s report on the benefits system in Wales, the Government has confirmed work being undertaken to ensure more people are aware of their ability to claim Pension Credit. The Government also states that work was undertaken to understand better understand the benefits to and tax impacts on those undertaking the Welsh Government’s Basic Income Pilot. However, the response leaves numerous questions unanswered, on which the Committee will be seeking clarity.

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The Committee received evidence as part of its inquiry of a lack of awareness among the wider public of key benefits, most notably Pension Credit. As a result, the Committee recommended that the Department for Work and Pensions and the Welsh Government work together with local authorities to run a take-up campaign. In its response, the Government has set out the different phases of its take up campaign, including around social media and in regional and national newspapers.

Evidence to the Committee also indicated that those participating in the Welsh Government’s Basic Income Pilot were not aware how it could impact their benefits they receive and the tax they pay. The Committee therefore recommended that an impact assessment is carried out on the benefits received and the taxes paid by the average potential participant. The Government confirmed that information has been passed on regarding how Universal Credit could be impacted by the pilot, and HMRC has advised about the treatment of taxation.

Among the responses to the Committee’s other recommendations, the Government rejected reintroducing the £20 Universal Credit uplift, to review the level of Statutory Sick Pay and to use nearer-term forecasts to increase benefits in line with the actual rate of inflation.

The Committee is planning to follow up with the UK Government on a number of issues. This will include the involvement of the Department for Work and Pensions in the Welsh Government’s Basic Income pilot and seeking further clarity on the Government’s position on the devolution of the administration of benefits.

Chair's comment

Welsh Affairs Committee Chair, Rt Hon Stephen Crabb MP, yesterday said:

“With rising levels of inflation outpacing income, people are watching their incomings and outgoings more than ever before. Knowing exactly what benefits individuals are entitled to, and how participation in benefit pilots can impact those benefits and tax, is critical. I am pleased the Government has today set out how it will improve its communication around Pension Credit so that more people are aware of it. It is also welcome that the UK Government has set out possible impacts to Universal Credit payments and taxation relating to the Welsh Government’s Basic Income pilot.

“I welcome the Government’s £37 billion support package to help with the cost of living crisis, and implore ministers to continue doing all they can to cushion the blow for millions around the country as the crisis looks to deepen in the coming months.”

The Committee has also published the Welsh Government’s response to its report today.

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