The Benefit Cap
The Benefit Cap is a limit on the total amount of income from certain benefits a household can receive. The Benefit Cap is the same amount of money, regardless of how many people are in the family.
Note that there are some benefits claiming situations that exempt people from the Benefits Cap. You can find out more details about this, and in work benefits, via this website.
How much is the Benefit Cap currently?
£442.31 per week (£1,916.67 per month or £23,000 per year) for couples and lone parents in Greater London
£384.62 per week (£ 1,666,67 per month or £20,000 per year) for couples and lone parents outside Greater London
£296.35 per week (£1,284.17 per month or £15,410 per year) for single adults in Greater London
£257.69 per week (£1,116.67 per month or £13,400 per year) for single adults outside Greater London.
The Benefit Cap is a very tricky customer. The idea that someone out of work, can receive more money than someone in work, initially feels like a persuasive argument which provokes feelings of anger in people. But we need to look beyond our initial cross feelings when considering the Benefit Cap.
£20 000 a year in Benefits may sound like a lot, but consider that the majority of that money will be in most cases going towards paying for housing costs. Housing costs, in relation to wages have become sky-high in many parts of the UK. This is because successive governments have failed to build enough new houses to match demand. The supply of new housing has also been restricted by the establishment for reasons of selfish greed. If housing supply is low, but demand is high, rent prices go up and landlords gain financially from this.
In practice, the Benefit Cap means a family often has less money coming in than it needs to feed and clothe the children. If a family of 2 adults and 4 children is capped at £1666 in benefits per month, and the rent is £1200 a month – a typical rent for a private house in the South of England – the family will only have £107.54 per week, for all other household costs, for a family of 6.
Increasing the supply of housing to match demand, will help lower rents – and therefore everyone’s costs.
Before the Tory Benefit Cap, the benefits system already had a cap anyway, in that welfare payments were small and gave little or no extra for luxury items. People talk unkindly about people on benefits and big-screen TVs – but if you scrape up £100 you can buy a second-hand big screen TV. We live in a globalized economy where electrical goods are cheap: a £30 second-hand smart-phone is no evidence of living in the lap of luxury at the expense of the taxpayer.
The Labour Party has called for the Benefits Cap to be scrapped, in 2020, there was a 93% rise in households hit by the Benefit Cap, with affected households losing £248 per month on average. The majority of these households are single parents, with children.
The Parliamentary Work and Pensions Committee has reported that: ‘many affected by the cap faced an “intolerable” financial position, with households falling into rent arrears and consequently losing their homes. Evidence submitted to the Committee from Plymouth Community Homes found that 55% of tenants affected by the cap fell into rent arrears.’
However, some Labour MP’s have since abstained on a 2022 vote relating to the Benefit Cap.
The Benefit Cap is an arbitrary amount of money, which does not have any relation to how much household costs actually are in practice.
I’m not saying people should have unlimited Benefits, of course we have to live within our means as a country, and be financially responsible. Rather, I’m suggesting the cap could instead be related to a median private rent for the area in which the claimant lives; and also that Benefits are no longer capped at 2 children maximum.
If we don’t give claiming families enough money to heat their homes, pay the rent and provide food and clothes for all their children, these families are going to be pushed into food and fuel poverty, and potentially face homelessness. These issues are especially important during the current cost of living crisis.
Other parts of Universal Credit, which didn’t work in practice, have since been cancelled, yet the shockingly cruel and unjust Benefit Cap conspicuously remains.
Surely as a society we can do the right thing and rescind the current form of the Benefit Cap. Instead, we need policy that ensures basic necessities for people, the Conservative Benefit Cap, makes no such assurance.
James Bickle.
This article is the personal view of a member of the Meon Valley Constituency Labour Party (CLP) and may not represent the official policy or views of the Labour Party.