Universal Credit and the benefits cap

The governments controversial benefits cap has come into force, albeit on a trial basis in four London boroughs before the national rollout scheduled to begin in July through to September. The London boroughs affected by the cap are; Bromley, Croydon, Enfield and Haringey.

The benefits cap levels are;

£500 a week for couples (with or without children living with them)
£500 a week for single parents whose children live with them
£350 a week for single adults who don’t have children, or whose children don’t live with them

There are certain exceptions to the benefit cap highlighted by Gov.uk ;

“You won’t be affected by the benefit cap if anyone in your household qualifies for Working Tax Credit or gets any of the following benefits:

Disability Living Allowance
Personal Independence Payment
Attendance Allowance
Industrial Injuries Benefits (and equivalent payments as part of a war disablement pension or the Armed Forces Compensation Scheme)
Employment and Support Allowance, if you get the support component
War Widow’s or War Widower’s Pension”

What is included in the Benefits cap?

The cap will apply to the total amount that the people in your household get from the following benefits:

Bereavement Allowance
Carer’s Allowance
Child Benefit
Child Tax Credit
Employment and Support Allowance (unless you get the support component)
Guardian’s Allowance
Housing Benefit
Incapacity Benefit
Income Support
Jobseeker’s Allowance
Maternity Allowance
Severe Disablement Allowance
Widowed Parent’s Allowance (or Widowed Mother’s Allowance or Widows Pension you started getting before 9 April 2001)

Directgov have supplied a calculator to assist with calculating an estimate of how you could be affected

Benefit Cap Calculator

Feelings are certainly running high regarding the benefits cap on both sides of the political fence. Iain Duncan Smith has nailed his colours to the mast stating “The benefit cap sets a clear limit for how much support the welfare state will provide – the average wage for working households. But it’s also a strong incentive for people to move into work and even before the cap comes in we are seeing thousands of people seeking help and moving off benefits. We have a very clear message: we will provide support to those who need it, but the days of outrageous claims giving people incomes far above those of working families are over.”

Ed Miliband, the Labour leader responded to the benefits cap offering “The first thing the government should be doing to reform welfare is to put people back to work and offer people real jobs with real responsibilities. “We’ve said we’re in favour of a benefit cap but it has got to be adjusted regionally depending on housing costs in each region. The danger of the way the government is doing the cap is that it forces people into temporary accommodation, bed and breakfasts, which drives up costs not reduces them.”

Many charities have also highlighted there concerns over the benefits cap namely;

Gingerbread : “The cap doesn’t begin to tackle the underlying problems of the shortage of low-cost social housing. We fear that many children will be pushed deeper into poverty or uprooted from their communities, schools and family networks as a result.”

CSAN : “As the roll-out of the cap begins, Catholic charities are preparing for increased demand on their services This cap has been set at an arbitrary level and does not take into account the actual costs required to meet peoples’ basic needs. We have real concerns that families may be left struggling to pay for basic essentials such as food, rent and heating and may even be at risk of losing their homes as a result of this change. The household benefit cap will have a disproportionate impact on larger households and families living in London. Our member charities are already seeing the impact of rising levels of child poverty and we fear that the introduction of this cap alongside other changes, could force more vulnerable families into poverty.”

Joseph Rowntree Foundation : “Last year I warned that we risk a decade of destitution. Some thought I was being over-dramatic,” says Julia Unwin, head of the Joseph Rowntree Foundation. “I am more convinced than ever that we have a perfect storm brewing; the reforms to welfare, the economic slowdown and spiralling costs, together with an increasingly spiteful tone in how we describe people in poverty, risks the UK becoming a nation where people face destitution.”

CPAG : “The coalition is on course to leave behind the worst child poverty record of any government for a generation”.

How will the benefits cap affect you? Should there be different levels of benefit caps in different areas of the country? Your views matter.

Benefits cap pilots claim DWP cash is not enough – Inside Housing 19/04/2013


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