The head of the Department of Work and Pensions has dismissed the idea of giving everyone on Universal Credit a one-off bonus payment of £500 or £1,000 this year.
And she says there is as yet no decision on whether the benefit will be slashed by £20 a week from April.
Therese Coffey said a £500 or £1,000 ‘bonus’ for Universal Credit claimants this year was not her “preferred approach” and not the “best way” of supporting the poor.
Chancellor Rishi Sunak is understood to have looked at the payment in exchange for slashing UC by £20 a week from April, reports The Mirror.
But Dr Coffey told MPs on the Work and Pensions Committee: “I think there’s a very fair point about disincentives. There are some challenges about fraud."
On the bonus she added: “That would not be one of the department’s preferred approaches on providing that financial support... We’re not sure that’s the best way to deliver that.”
Dr Coffey said she still doesn’t know if the Chancellor will cut Universal Credit for 5.9million people in his March 3 Budget.
The standard allowance was raised due to Covid but that was temporary, and faces being cut back by £85 a month from mid-April.
She suggested keeping the £20 rise was “politically complicated” and added: “Discussions are still ongoing with other parts of government and no decision has yet been reached.”
Dr Coffey added: “How can I put it - I wouldn’t say no to a one-off payment if in the end that was the decision that was taken, because it still would be financial support,” she told MPs.
Dr Coffey said the future of Universal Credit was under “active discussion” and suggested it may be announced earlier than March.
She told MPs: “Budget proposals are still being worked up and will go through the normal process. This has been a separate approach which is under active discussion.”
A Downing Street spokesman said: "Discussions are still ongoing and no decisions have been reached."
A £500 or £1,000 payment was raised last month as one way of compensating people for cutting Universal Credit.
