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 220.

    Let's be really many of those people getting £500 a week tax free benefits could realistically earn in excess of £38K per annum [which is what they would need to earn to to bring home that much]? Not many because they have no skills, training or education that would put them in that salary bracket. It is an insult to people who do work to have to fund people who have never bothered

  • rate this

    Comment number 219.

    A vicious lie - nobody who is genuinely seeking work is influenced by diminuition of what is already an inadequate level of support... the jobs plain are not there! Do not be deluded by self-serving politicians in their attempts to cover up their neglect of their duty of care to those whose lives their failures have shattered. WE WANT WORK!!!

  • rate this

    Comment number 218.

    It's pretty obvious the entire point of this cap is to make the slower amongst us assume that everyone on benefits gets this much and so we should be slashing it even more.
    It's incredibly depressing how many people are falling for it on here :(
    Another victory for divide and rule.

  • rate this

    Comment number 217.

    Standard BBC left wing slant. Introduce story (with the least impartial headline they can get away with). Comment from government rep and opposition/shadow cabinet member (fair enough). Comment from a left-leaning think-tank or socalist commentator (in this case Owen Jones on the BBC news channel). Any counter comment from a right-wing commentator to ensure impartiality? Dont be daft.

  • rate this

    Comment number 216.

    199. Major_Tom

    I have heard there's a 6 month job 700 miles away. Would anyone currently in employment be happy doing this commute themselves?


    What is your postcode - I will find you at least 100 available jobs within 20 miles. I'll do it whilst I am already working full time too.

  • rate this

    Comment number 215.

    For those who are humbugging about £500 per week - this is a headline figure intended to create the impression that anyone on Benefits ( actually most people claim 1 or more benefits ) is raking in many hundreds of free money. The reality is that most unemployed are on £71 per week (£112 for a couple) but why let truth get in the way of a good story?

  • rate this

    Comment number 214.

    I agree with the principle of a benefit cap but think it should vary depending on a regions' cost of living. The biggest cost is housing and that has huge regional variations. I also think there should be processes put in place to stop spending on luxuries others can't afford, for example, a ban on foreign travel & satellite TV

  • rate this

    Comment number 213.

    just back from work :) I think the benefits cap is MEAN! I do love working,especially voluntary work :) As a 'tax payer' I say again I THINK THE BENEFITS CAP IS MEAN!! Those who support it - seem to hate the job they're doing and -it's like I selfish kind of meanness supporting the benefits cap i.e."I have to do a job I hate so those not working must SUFFER!" Help DON'T punish those not working!

  • rate this

    Comment number 212.

    No way! The free money dries up and this encourages people to get a job? What next?

  • rate this

    Comment number 211.

    I find many of the comments on here hard to stomach.

    Cries of 'well done' to a bunch of rich morons in power who are taking money of the poor to subsidise the wealthy.

    What a jealous and spiteful people we have become.
    I'm glad I'm childless - I wouldn't want any kids of mine to grow up in modern Britain.

  • rate this

    Comment number 210.

    We already know this figure to be a lie - the ONS have told IDS to stop using it. Surpised it isn't mentioned in the article above (I'd be surprised if the Beeb were spinning an IDS story, so I'll put it down to laziness/incompetence on the part of the journo and sub-ed.) Anyway, here it is;
    IDS / DWP = bunch of lying toads.

  • rate this

    Comment number 209.

    You do know that most of the unemployed won`t get anything near 500 pound`s. It average is about 77 for a single person and about 110 for a couple. But like I say before a lot of people don`t want to be unemployed

  • rate this

    Comment number 208.

    Benefits should be capped much lower, and the money should be used to train the "useless tools" claiming benefits.

    Most of the unemployed are unemployable because they do not have thw work ethic. They have been given stuff all their life, so all they know is how to receive it!.

    Take responsibility for your OWN life, train yourself, read books, use your own initiative. Stop giving in!!!!!

  • rate this

    Comment number 207.

    This won't affect many people. Let's have a decent minimum wage and stop handing over billions a month in tax credits to subsidise greedy employers who don't pay a decent wage.

  • rate this

    Comment number 206.

    Rather strange that there is a uniform cap on benefits when it is Tory policy that pay should vary according to the region in which one lives, surely to pursue such logic demands that caps should vary by region as well.

    And why is Northern Ireland not included, is it because of the old tie between conservatives & unionists? Enough has already been invested in NI in terms of blood & treasure.

  • rate this

    Comment number 205.

    call ourselves christians . why not have done with it put all the poor against a wall and shoot them , and then make the kids beg for a living . why are they in this mess needing money and food banks do you think its threw choice . god forbid all you people with money ever need any help in your life

  • rate this

    Comment number 204.

    I know first hand that you take away peoples benefits and they find other ways to survive. Most will find work and actually be better off mentally and financially.
    Benefits are not a right of passage or an early retirement present. They are there as a backstop for a short period of time, including housing and sickness benefits.
    If you are messing with the system others miss out and they suffer.

  • rate this

    Comment number 203.

    My daughter, who left college three years ago with 5 GCSEs and a BTEC, has not been able to find a full-time job in that time. She applies for around 20 jobs a week, but she is either over-qualified, under-qualified or the job is commission only or zero hours contract. How can IDS imply that people are not looking for work. What they need to do is to create more real jobs.

  • rate this

    Comment number 202.

    Maybe this will have an impact on the rental market too with less government money available for social tennents landlords may have to get real.

  • rate this

    Comment number 201.

    There is a great deal of left leaning twaddle on this site. The fact is that our current capitalist society does not owe anyone a living, you have to get off your backsides and work for it.

    £500/wk., don't make me laugh. This must equate to a circa £40K/yr. salary. Get real.

    The harder anyone works, the luckier they tend to become !


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