U.K. Minister Says One-Off Welfare Bonus Not Preferred Option

(Bloomberg) -- Work and Pensions Secretary Therese Coffey rejected the idea of paying a one-off bonus to U.K. welfare claimants in lieu of continuing weekly pandemic support.

“We are not sure that’s the best way to deliver” support, Coffey told the House of Commons Work and Pensions Committee on Wednesday.

Coffey was commenting on the prospect of replacing a 20-pound ($27) weekly uplift in Universal Credit benefits payments with a one-off bonus of 500 pounds or 1,000 pounds when the extra payments come to an end in April.

Her remarks illustrate the tensions within government over the assistance, which was introduced by Chancellor of the Exchequer Rishi Sunak last year to help those on benefits weather the coronavirus pandemic. The Treasury has repeatedly stressed that the measure was only ever intended to be temporary, but Members of Parliament from all parties want it extended to protect those on low incomes or without work as the outbreak persists.

Coffey held talks with Sunak and Prime Minister Boris Johnson last month in an effort to devise a solution. Ministers are weighing options including one-off bonuses of as much as 1,000 pounds, and extending the weekly raise by as much as a year.

Based on 5.7 million universal credit claimants, a one-off bonus of 1,000 pounds would cost about 5.7 billion pounds, replacing a similar annual cost resulting from the 20-pound uplift.

“Previous experience would be that a kind of steady sum of money would probably be more beneficial to claimants and customers to help with that budgeting process,” Coffey told the committee. A one-off bonus “would not be one of the department’s preferred approaches on providing that financial support.”

Nevertheless Coffey showed a willingness to compromise if needed. “I wouldn’t say no to a one-off payment if in the end that was the decision that was taken, because of course it would still be financial support,” she said.

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