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 400.

    Forcing someone to do something against their will might gain you some short term results (they might 'play the game' for a while) but studies on human nature indicate that, in the longer term, many will rebel and goodwill will be lost. Watch for an increase in crime in the near future. Compare cost of processing someone through the Criminal Justice System to that of paying them modest benefits.

  • rate this

    Comment number 399.

    Get rid of the benefits system entirely, and watch how rapidly the economy will improve on many fronts, e.g:

    (i) National debt
    (ii) Unemployment / job creation
    (iii) Benefits tourism

    Otherwise watch how the system continues to rot the country from the inside until it's too late.

  • rate this

    Comment number 398.

    I think everybody`s favourite loony baronet means `arbeit macht frei` in keeping with his party's views on the poor, disabled, elderly and unemployed.

  • rate this

    Comment number 397.

    What's everybody so wound up about? The big robbers are the bankers - they've taken BILLIONS of our money. This is going to save £100m? - just a few pence in comparison - but then its always easier to kick the poor and disadvantaged rather than face up to the powerful bullies, the vested interests and the power elite. And we fall for this propaganda - why are we so dumb?

  • rate this

    Comment number 396.

    In Summer, an whole generation of school, college and university students will enter the job market. Add to that the pensioners that can't afford to retire.

    People who previously were not affected by unemployment and immigration. We'll see a change in the nature of the comments on here come xmas time !

    Btw. When an immigrant has a child, that child is English, and usually working class !

  • rate this

    Comment number 395.

    Rubbish it encourages division in society while the tories loot the country bare if its ok for us to live on that then MPs should live on the same with no expenses

  • rate this

    Comment number 394.

    236 Jay

    well said

  • rate this

    Comment number 393.

    Apparently shares in BSKYB (Sky TV) have plummeted today upon news that benefits are to be capped.

  • rate this

    Comment number 392.

    Spot on there sir. People aren't daft they know what is going on and has done for years. People fleecing the system left right and centre and those that really need help can go hang. No wonder the government has majority support for sorting this dreadful situation out.

  • rate this

    Comment number 391.

    Ahhh the psychology of the Working Class Tory voters. I mean they're only a Lottery win away from having the finacially insulated lifestyle that befits their politics.
    Until then they're quite content to come on here and defend the rich with that lovable Dick Van Dyke Mary Poppins Gawd Bless ya Majesty GUSH !
    Like Steinbeck said "Temporarily embarrassed Millionaires " .

  • Comment number 390.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 389.

    Labour need to wise up those of us from working class backgrounds are fed up having to listen to these benefit scroungers drinking in their back gardens till gone midnight when we have to be up for work the next day. This benefit cap needs to be £15000 tops to encourage these types into work. To many middle class poltitcos who have not lived in the real world.

  • rate this

    Comment number 388.

    me and my partner work 70 hours between us and take home 380 a week. the people who live around my area who have the same and never worked not paid nothing in. for all the people who say there aint jobs there are loads of jobs its just you dont get paid what you think you should and cant be bothered to wake up and go to work. this country is based on people on the dole.

  • rate this

    Comment number 387.

    This new policy would go down a lot better if the cap applied to MPs benefits/expenses as well.
    Surely to lead by example is a better approach than dictating to others .

  • rate this

    Comment number 386.

    372 Hina

    Its easy ... Move. I move from Birmingham to Bournemouth in 1986 to work and have been employed ever since.

  • rate this

    Comment number 385.

    370. Louise:
    A fine system. Man. If only I could afford to spend my JSA on such luxuries. Food? Who needs that?

    These kind of comments aggravate me, I do wish you'd all look at the facts and not the spin from the media. IDS has been reprimanded for his incorrect figure use. The issue is no-where near as bad as you think. How about we target the /real/ scroungers? Landlords.

  • rate this

    Comment number 384.

    It's not the government's money the benefits claimants are getting.

    It's mine and every other taxpayers'.

  • rate this

    Comment number 383.

    how different this hys would be if they, as they should have, let the banks fail in 2008, im sure we are going to be paying for your govt subsidised savings forever.

  • rate this

    Comment number 382.

    I am happy for cuts to welfare but this should also go hand in hand with sufficient jobs being available.

  • rate this

    Comment number 381.

    If 50% are lone parents why is the absentee parent not made to live up to their responsibilities?"

    Perhaps because they are dead or gone away and become untraceable or never existed - ever heard of artificial insemination? There is NOT always an "absentee" parent despite the tabloid stereotyping regurgitated daily on these discussion boards.


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