6.1 Low income is the third contributor to fuel poverty. A wide range of action has been taken across Government to tackle poverty through improved incomes. Significant progress has been made in tackling pensioner poverty and child poverty, and the Government has redoubled efforts to address these challenges.

Incomes for vulnerable households

6.2 The UK Government has put in place a range of measures to tackle poverty and increase the incomes of vulnerable households.

6.3 Significant progress has been made in tackling pensioner poverty. Since 1998, 900,000 pensioners have been lifted out of relative poverty and 1.9 million pensioners have been lifted out of absolute poverty after housing costs are accounted for.

6.4 Pension Credit is a key part of the strategy to tackle pensioner poverty and is making a difference to the incomes of thousands of older people. Pension Credit means that people aged 60 or over need not live on an income of less than £124.05 a week for single people and £189.35 for couples. Pensioners with severe disabilities, caring responsibilities and certain housing costs may receive more. Pension Credit also rewards people aged 65 or over who have made modest provision for their retirement.

6.5 The Government has also invested in helping disabled people remain independent, by supporting the diverse needs of disabled people and carers. In 2008/09, over £16billion of benefit payments will be administered by the Disability and Carers Service. There has also been progress in empowering more disabled people into work, with 48.4% of disabled people in 2007 in work compared to 42.4% in 2000.

6.6 Disability benefits paid to help with the extra costs associated with disability, principally disability living allowance (paid to people who qualify and claim before age 65) and attendance

allowance (paid to people who qualify and who claim from age 65) are not means tested and are ignored in calculating income related benefits. They are paid to people in work as well as those who cannot work, at different rates according to the effect of disability on recipients’ lives. Recipients of these benefits can set their own priorities for how to spend this money.

6.7 Those with low incomes may qualify for help with rent and council tax through Housing Benefit and Council Tax Benefit. They may also qualify for a top-up from income support. For example, they might receive a top-up to bring them to £86.35 a week if they qualify for the disability premium of £25.85, or £110.85 a week if they qualify for the severe disability premium (£50.35). The premiums paid to disabled people who have low incomes and qualify for income-related benefits are intended to contribute towards the extra living costs they may incur.

6.8 The Government has set itself ambitious targets to halve child poverty by 2010 and eradicate it by 2020. We have made significant progress towards these goals, not only halting the rising levels of child poverty in late 1990 but reversing that trend, so that, between 1998-99 and 2005-06 600,000 children have been lifted out of relative poverty in the UK. Joined up and sustained effort across Government has delivered a range of fiscal policies and public service reforms, backed up by substantial investment from successive Budgets and Spending Reviews. There have been increases in support and services to help parents, particularly lone parents, to overcome the constraints that may make work difficult. Since 1997 the Government has invested over £21 billion in early years and childcare services, enabling parents to return to work secure in the knowledge that their children are safe and being supported to learn and play. Labour market policies have helped many parents move from welfare into work. The number of children in workless households has fallen by over 400,000 since 1997. Since October 1998, the New Deal for Lone Parents has helped over half a million lone parents into work. Of these, 60 per cent are recorded as having entered sustained employment.

6.9 The Government remains firmly committed to its goal of eradicating child poverty in a generation. Even in a tight fiscal climate, this year’s Budget committed a further £950 million to halving child poverty by 2010. Taken together, reforms announced in Budget 2007, the 2007 Pre-Budget Report and Comprehensive Spending Review, and Budget 2008 will lift around 500,000 children out of poverty. The Budget also allocated £125 million over the next three years to test new approaches to tackling child poverty. These will inform a new strategy to 2020, building on the best of current policy, pursuing new and innovative approaches, and drawing on the strengths of all partners.

Winter Fuel Payments

6.10 In addition to Government’s wider action to increase the incomes of vulnerable households around 12 million people across the UK aged 60 and over received Winter Fuel Payments in the 2007/08 winter. The current rate is up to £200, with those over 80 (over 2.4 million people) receiving up to an extra £100. The Chancellor, in his Budget 2008 speech, announced an additional payment for winter 2008/09 of £50 for households with someone aged 60-79 and £100 for households with someone aged 80 or over. If Winter Fuel Payments were counted against fuel bills, we estimate they could remove a further 1 million households from fuel poverty in the UK.

Cold Weather Payments

6.11 Cold Weather Payments are payable by the Government to poorer pensioner and other eligible households in weeks of extremely cold weather. Over the last five years the number of annual payments made has averaged around 500,000. The Government has committed to tripling the payments from £8.50 a week to £25 for this coming winter.

       Benefit Entitlement Checks

6.12 Benefit Entitlement Checks are increasingly becoming part and parcel of fuel poverty programmes and can result in significant increases in incomes for vulnerable households.

6.13 In 2007/8 Warm Front began offering Benefit Entitlement Checks to all applicants who apply to the Scheme. This has allowed the Scheme to perform checks to almost 50,000 applicants, more than double those performed the previous year. Of these checks, 30% located a benefit to which the client was eligible but not currently claiming. The average value of these unclaimed benefits was £28.43 per week, or £1,478 per year.

6.14 In Scotland currently all pensioner households are offered a Benefit Entitlement Check at the point of application to either the Central Heating Programme or the Warm Deal, to ensure all eligible applicants are approved and to maximise incomes. Last year this generated a £1 million increase in benefits received. From August this year this offer will be extended to all applicants, not just pensioners.

6.15 Since August 2004 the Home Energy Efficiency Scheme in Wales has offered a Benefit Entitlement Check to all applicants to the Scheme. In 2007/08 3,357 households took up the offer of a check. Where additional benefits were identified it was estimated that households were eligible for an average of £17.88 per week in extra benefit income. This is equivalent to an annual total increase of £1,513,788 to those households.

6.16 The income maximisation service provided by Warm Zones Limited in its local initiatives has secured almost £10 million of additional welfare benefits, increasing the annual income of successful claimants by an average of £2,500.

Full Report to follow soon!