Benefits cap leads to more people in work, says government


Iain Duncan Smith "This is about saving money and changing a culture"

More than 12,000 people have moved into work after being told about the benefits cap, the government says.

The cap, on the total amount of benefits that non-working people aged 16 to 64 can receive, has begun rolling out across England, Scotland and Wales.

Couples and lone parents will now not receive more than £500 a week, while a £350 limit applies to single people.

But critics say the changes will hit parts of the country unfairly, and will not tackle underlying problems.

Those in work who also claim benefits, are not affected by the cap.

"What the job centre staff have told us is that they've seen a genuine increase [in people looking for work] since they've alerted people that they're likely to be in the cap," said the Work and Pensions Secretary Iain Duncan Smith, who has spearheaded these changes.

He argues the current level of benefit discourages people from looking for work.

"We will always be there to support those who need help but the days of blank cheque benefits are over," he said.

The Department for Work and Pensions (DWP) said that 12,000 claimants had found jobs over the last year, after being contacted by job centres.

The job centres warned them they might have their benefits capped if they did not find employment.


Key payments including jobseeker's allowance and child and housing benefit count towards the cap.

The Department for Work and Pensions estimates about 40,000 households will be affected.

Liam Byrne "The truth is that there is a huge loophole in the benefit cap"

Critics say the cap fails to tackle underlying issues, such as the difficulty of finding work, the cost of housing and regional differences.

The National Housing Federation (NHF) agrees with the principle that those on benefits should not earn more than those in work, but it argues that the cap does not work in London and the south-east, where rents are high.

Those affected by the cap have their housing benefit reduced.

"In many parts of the country, families won't be able to pay high private rents because of the cap," said Ruth Davison of the NHF.

"There will be more demand for than ever for affordable housing, particularly in Greater London where nearly half (49%) of the people affected by the benefit cap live."

The cap will be completely implemented by 30 September, and will then become part of the Universal Credit system.

Highcharts graph
Once a month

The cap, not yet law in Northern Ireland, is said to reflect the average working household income.

It has already been implemented in four London boroughs - Haringey, Enfield, Croydon and Bromley - since April.

Start Quote

The cap is outrageous. It seems unfair that I contribute, but when I need it, it gets taken away.”

End Quote Geoff Parker-Chance Benefits claimant

The benefits cap applies to people receiving jobseeker's allowance, child benefit, child tax credits, housing benefits and other key support from the government.

There is no cap on people who receive Disability Living Allowance or its successor, the Personal Independence Payment, as well some other benefits, such as industrial injuries benefit or a war widow or widower's pension.

"The benefit cap returns fairness to the benefits systems," Mr Duncan Smith said. "It ensures the taxpayer can have trust in the welfare system and it stops sky-high claims that make it impossible for people to move into work.

"The limit of £500 a week ensures no-one claims more in benefits than the average household and there is a clear reason for people to get a job - as those eligible for Working Tax Credit are exempt."

About £95bn a year is currently paid out in benefits to families of working age.

The government hopes the cap will save about £110m in the first year, and £300m over the next two years.

Moving out

The four local authorities where the cap has been introduced say they are struggling to introduce the measures.

One of them, Haringey, said it was given £1.8m by the government in the first year, to help with the transition, and ease cases of hardship.

But it estimates that this year alone it will have to add £2m of its own money to pay for the changes, which it said is not sustainable in the longer term.

One alternative is for families to move to areas where housing costs are lower.

"We will have to consult on what that means on potentially requiring families to move outside London, which I think is very difficult," said Claire Kober, the leader of Haringey Council.

Rebecca is a Sunday school teacher in Haringey, who may be affected by the cap when transitional support runs out.

She told the BBC she would not want to move away.

"I think moving out from my community will be missing me. If they move me out, I will start from zero," she said.

Geoff Parker-Chance, from Clacton in Essex, has worked for most of his life, but has been claiming benefits for the last year.

He believes the new system is unfair.

"The cap is outrageous," he told the BBC. "It seems unfair that I contribute, but when I need it, it gets taken away."


More on This Story

The BBC is not responsible for the content of external Internet sites


This entry is now closed for comments

Jump to comments pagination
  • rate this

    Comment number 40.

    That`s going to encourage more crime, where are all these jobs?

  • rate this

    Comment number 39.

    £500 a week is more than a lot of people who work earn.
    Why shoud people wo aren't working get more than those who do?
    Is this not the whole problem with the system in the first place?

  • rate this

    Comment number 38.

    The Govt has already accused the BBC of left wing bias but for me the BBC has not gone far enough investigating who exactly will feel the cuts most 26% of those getting housing benefit are low paid workers.
    This just does not sit right, already where i live there has been a lot of families move out because they can't afford the rents.

  • rate this

    Comment number 37.

    The 'capped' amounts are truly shocking. I know working people who subsist on two thirds of that amount before tax. It is no wonder that so many English people choose not to work (our plumber told me that most of his extended family chooses not to work.. and considers him stupid for doing so) and that lazy foreigners choose to come here and bring their families..!!

  • rate this

    Comment number 36.

    Just days after the news that every graduate vacancy has 85 applications people still trot out the same pish about people 'just not wanting to work'. Where are all these supposed jobs?

  • rate this

    Comment number 35.

    I am confused by the whole system, my partner has worked full time for over 30 years. Then 2 years ago he was paid sickness benefit for 9 months while waiting/recovering from heart bypass surgery. He was made redundant 2 months ago cannot get any benefit/jobseekers. How does this happen when you have paid in for 30 years ? ? ? Something is very wrong.

  • rate this

    Comment number 34.

    What happens now that you are privatising everything and the costs are hiked up way past what those on benefits can afford. ? Wil there Be a safety net to prevent an increase in child poverty? Personally I believe in self reliance, but I am also aware this is not possible for everyone and as a society w should care for one another and not victimise those who are vulnerable.

  • rate this

    Comment number 33.

    The benefit reform is certainly providing a mixture of outcomes.

    In some cases, the reform is promoting work, which is good for those who are fit, healthy, able to find work and not caring for others. The negatives are clearly the cost of living, which continues the cycle of dependency and benefits, limited employment and the prospect of eternal and disorientating debt.

  • rate this

    Comment number 32.

    Rearranging the deckchairs on the Titanic.

  • rate this

    Comment number 31.

    I work full time and I don't earn £500 per week after tax. If you cannot afford to live on £2000 per month after tax you are obviously wasting money on non essentials. Benefits should provide the bare minimum to live on ie food, clothing, roof over head and nothing else. Good on this govt for having the guts to take on the work shy in this country!!

  • rate this

    Comment number 30.

    £500 a week seems very reasonable to me.

    If you are living in an expensive area then find somewhere cheaper, it's called living within your means. Many working people have had to move many miles from where they'd like to be but they make do, it's not unreasonable to expect the unemployed to do likewise

  • rate this

    Comment number 29.

    It should not be possible for a healthy person to earn more on benefits than it is to work. If this is down to childcare issues then why not invest some of the benefits budget into state run child care (creates jobs as well)

    It really annoys me to think im working hard so i can have a life while my money goes on scroungers. some of whom turn into baby making factories to get more from the state.

  • rate this

    Comment number 28.

    A huge saving in benefits could be made if income support for those already working wasn't needed because of cheapskate wages being paid by massive companies who can well afford to pay better.
    only 10% of the total welfare budget goes on the unemployed.

  • rate this

    Comment number 27.

    2 I don`t think people choose to be unemployed ?

  • rate this

    Comment number 26.

    Yes cap benefits as long as work and alternative cheaper provision is available. However jobs are not in great supply and the housing market needs to be corrected by another slump. Thus this targets the poor whilst failing to address the REAL issues of low pay and high housing costs. We need a change in policy to tax the rich and business before we get too much poverty in this country!

  • rate this

    Comment number 25.

    I have sympathy for the easy liberal leftish sort of comments of oh its unfair when rich people dont pay taxes but I have 1 question: what are you going to do about it? Intl law encourages freedom of movement and finances, we cant change that...

    Welfare expenditure is unsustainable & it has to be reduced somehow. The only way you'll get rich people paying is a Revolution

  • rate this

    Comment number 24.

    I believe that the Government’s claims about numbers moving into work as a direct result of the benefits’ cap need to be treated with a large measure of scepticism. Ministers in this administration have a dishonourable track record of wilfully misrepresenting and misusing official statistics and have had their knuckles rapped on several occasions by the UK Stats Authority as a result.

  • rate this

    Comment number 23.

    12,000 - more IDS & DWP lies, expect another rap on the knuckles from the ONS in the near future - this man is an vicious idiot.

  • rate this

    Comment number 22.

    How anyone can say that this cap will encourage unemployed people to get a job is beyond me. The vast majority of the unemployed are desperate to work and always were. What the cap may do though is encourage thousands of Britons towards violent revolution.

  • rate this

    Comment number 21.

    @3: Voted out and replaced by whom exactly? The party who know where the magic money tree is located?!


Page 72 of 73


More Business stories



Copyright © 2015 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.