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."


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  • rate this

    Comment number 180.

    The cuts are fine. There will be unfortunate isolated cases in well off areas, but as a whole, Its a step in the right direction and lets be honest. We still have a 'world class' welfare system, but its one that is on the path to sustainability and encourages those not to pursue this lifestyle, and those that choose it, to consider change it.

  • rate this

    Comment number 179.

    100. Liv
    "Anyone who has benefits removed. Please cancel all bank loan / credit card repayments at once."

    and why has someone on benefits got loans & credit cards, if the only way they can finance them is through their benefits?

    Ok a tiny % there will be those who have recently lost their jobs, but they would have contacted their creditors when they were made redundant so not them, but the rest?

  • rate this

    Comment number 178.

    There must be a large number of working families who don't bring home £500 per week after tax, I hope the cap gets reduced in the next few years.
    I also hope the cap will result in rents being pushed down and ultimately a drop in house prices.

  • rate this

    Comment number 177.

    This is an appalling manipulation of figures to justify penalising the poor and unfortunate in our society to cover for the fact that the main cost from the £500 is a subsidy from the taxpayer to private landlords.
    The government should tackle this issue by building more council houses and stop selling the social houses that are already in the system.

  • rate this

    Comment number 176.

    we knew on this HYS there would be the "oh look they get £500 a week" in reality very very few actually get that amount the norm is around £220. Easy to say get to work but I work in a Job Centre and constantly see people trying really hard to get work with no success.

  • rate this

    Comment number 175.

    Don't agree with this. Either people need benefits or they don't. A cap won't resolve any issues, it'll just create them. I bet 1000 genuine people who need the benefits will be affected for each 1 person who is trying to claim more than needed.

  • rate this

    Comment number 174.

    As another poster says, there are nearly a million jobs (not all full time or with a wage I might add) and over 2 million unemployed people. You do the maths. I've seen some of the hard core in the Job Centre when I was one of their number a few years back. You would not want some of these people in your organisation. , Uneducated with no social skills at all. Not all but quite a few I overheard

  • rate this

    Comment number 173.

    I am on job seekers, my partner works but we don't have £500 a week to live on. Do's that mean we will get more money. By the way the government are talking out of their behinds if they think 12,000 people have found work since IDS past wind and came up with the idea of putting a cap on benefit.

  • rate this

    Comment number 172.

    No jobs, food and utility bills increasing, Child Care going sky high, rent prices are out of control, and the government expect the poorest to find the extra money to make ends meet. OK, this idea might be sound in principle but it will have adverse effects on the vulnerable. But at least we're all in this together, eh?

  • rate this

    Comment number 171.

    its just moving the ball around its all smoke and mirrors reality is it's all a lot worse then they let on.yes put wages up but they wont do that because of interest rates&we all know what happens then,so what do they do cut cut cut use whats saved to give themselves a 11% pay rise we end up with a 9+% pay loss & less services but paying through our teeth for it.OH and whats left for a train set.

  • rate this

    Comment number 170.

    Amazes my how many people fall for propaganda .. Comparing the salary of a single person with a household benefit cap is like comparing apples and pears.

    If you want a fair comparison - compare the combined salaries of a working couple and the £25 grand limit on a household .. Too many people falling for the IDS claptrap.

    Still, there does need to be a limit and if it's 25k than fair enough.

  • rate this

    Comment number 169.

    133. giveme a job "Who gets these amounts? £350pw for a single person? My last job didn't pay that much." Not many people get these amounts, its a very tiny amount of people who get that sum, still when you need to tar people and feather them its always handy to have a tiny stat to stir up anger and cover up the failure to create jobs and build affordable housing.

  • rate this

    Comment number 168.

    Or to put it another way, '12000 people have decided to get a job because they're better off working now'. Try £300 and let's see what happens!

  • rate this

    Comment number 167.

    Now the next step is to stop all benefits, so if you dont work you dont get money. Funny hey, think of that. No more free money. God Brits would be up in arms. But joking aside so many countries dont dish money out for lardy arses and benefit cheats. Im not saying dont help those that really really need it though !!! There are SO many jobs out there people just dont want to work for the money !!

  • rate this

    Comment number 166.

    Most benefit's (housing) is paid to people IN WORK - a rent cap, a livable minimum wage these are things that will introduce true fairness into our society. Yes some people take everything they can get but they are a small number to be pitied not vilified.

  • rate this

    Comment number 165.

    Here we go again - let's focus on social security claimants, as if they caused the economic crisis. This is just an ideologically-driven attack on the welfare state. No doubt the recently reported stresses on the NHS will soon be used to introduce charges. I work full-time and pay tax, but I see no problem with adequate social security that doesn't drive people to desperation and food banks.

  • rate this

    Comment number 164.

    Not a very impartial headline, BBC. Starting to go elsewhere for news.

  • rate this

    Comment number 163.

    Can we please have clarification from IDS where this 12,000 figure came from.

    One would assume he means 12,000 individuals who have been out-of-work for some time and are now in full-time working?

    Is this the case?

  • rate this

    Comment number 162.

    I'll get marked down for saying this, but perhaps there will be encouragement for couples to work at their relationships and stay together, if single parents are seen to be struggling financially.

  • rate this

    Comment number 161.

    Small point, they seemed to have missed, there is not 2.5 million jobs for the unemployed.


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