Plans to cut Universal Credit payments by £1,000 a year from this spring could be scrapped - according to reports.
Prime Minister Boris Johnson, who signalled earlier this week the £1,040-a-year increase would end as planned, has held a meeting with Mr Sunak and Therese Coffey, the Work and Pensions Secretary, The Daily Telegraph has reported.
A planned £1,000 a year cut to Universal Credit, described as a lifeline for struggling families, will be voted on by MPs on Monday.
Labour will use its opposition day debate in the Commons to force a vote on plans to end the temporary increase to the benefit, which was introduced by Rishi Sunak in response to the coronavirus pandemic.
But the increase, worth £20 a week, is due to expire in April – potentially hitting the incomes of six million families.
Shadow work and pensions secretary Jonathan Reynolds said: “Boris Johnson’s decision to cut Universal Credit will hit millions of families who are already struggling to get by.
“There cannot be another repeat of the Government’s indecision and mismanagement of the free school meals scandal.
“The Government must put families first during this lockdown and act now instead of waiting until the last minute.
“If ministers refuse, Conservative MPs have the opportunity to vote with Labour and give families the support they need to get through this pandemic.”
Labour highlighted figures from the Joseph Rowntree Foundation which warned that 200,000 children could be pushed into poverty by the changes.
The motion Labour will put to the Commons on Monday will state: “That this House believes that the Government should stop the planned cut in Universal Credit and Working Tax Credit in April and give certainty today to the six million families for whom it is worth an extra £1,000 a year.”
A session of the All-Party Parliamentary Group (APPG) on Poverty on Thursday heard that the “lifeline” of the uplift should not only be extended past March but increased.
Baroness Ruth Lister told the group that there are “rumours” the Chancellor may extend the uplift but then freeze Universal Credit payments until inflation “catches up” with it.
Francesca Maddison, policy and partnerships officer at the Joseph Rowntree Foundation, said this would not be “good enough”.
She said: “Our position is I’m sure probably shared by a lot of people, it will be a retrograde step to yet again break the principle that social security support at the very least keep up with the rising costs of living for people… we need to really think about the fact that anything other than £20 uplift being preserved and extended to legacy benefits, and with the usual CPI (consumer price inflation) uplift, would not be… good enough and it’s not what we’re asking for today.”
The APPG also heard evidence that, if the uplift is not extended, an extra 224,000 households, including 229,000 children, will be unable to meet their essential costs.
The Policy in Practice social policy analytics company said larger families and the self-employed would be particularly affected if the uplift is removed.
The £20 boost must also be extended to people receiving legacy benefits, the APPG heard.
Michelle, a single parent receiving legacy benefits, said she had been forced to take out credit to afford food, water, electricity, heating and shoes.
She has been advised that, if she were to move to Universal Credit, she would have to prepare for several weeks without income, which “would leave us teetering on the brink of a financial domino effect”.
“I cannot, as a responsible mother, take that risk,” she added.
Asked what difference being able to receive the increase would make, she said: “Ultimately, the £20 uplift would go directly towards the health and prospects of a generation of children – my children – who have so much potential, resilience, imagination and compassion due to their circumstances and the times we live in.
“And all we need to do is to support their parents to get those children to a point where they can build a good life for themselves.
“This will not happen if, for the sake of £20, they are hungry or cold or their needs are not met. The £20 uplift is the foundation of hope for children.”
Shirley Widdop, a disabled parent who is also on legacy benefits, said she is “dismayed” and “bemused” as to why the uplift was not distributed equally to all benefit recipients.
She noted that the increase has not always had a decisive impact on families experiencing hardship, adding: “Therefore, it is vital that Chancellor Rishi Sunak preserves and considers increasing the £20 per week uprate in April. Make it permanent, given that we’ve now entered our third lockdown.
“He needs to extend it to include all of those that remain on legacy benefits – it would be the most compassionate, equitable and right thing to do.”
A Government spokesman said: “We are committed to supporting the lowest-paid families through the pandemic and beyond to ensure that nobody is left behind.
“That’s why we’ve targeted our support to those most in need by raising the living wage, spending hundreds of billions to safeguard jobs, boosting welfare support by billions and introducing the £170 million Covid Winter Grant Scheme to help children and families stay warm and well-fed during the coldest months.”
Insiders insisted talks were ongoing and no decision had been made.
The Prime Minister told MPs on Wednesday he would "rather see a focus on jobs and a growth in wages than focusing on welfare".
He also claimed “the best thing is to get people into employment" - despite the fact 39% of the 5.7million Universal Credit recipients are already in work.