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 420.

    i am 58 and never been on the dole but i am worried for the young we are inporting more u.s. managment by the day ie no contract jobs more part time we are even replacing full time armed forces - teaching ass for trained teachers - nursing ass for trained nurses and on. this is all about working for less pay while the rich get richer

  • rate this

    Comment number 419.


    You couldn't be more wrong, pensions are the biggest proportion of the benefit bill,"

    Pensions are pensions, not "benefits." It is only recently that evil, lying, slimy politicians have started calling pensions a "benefit" in preparation for their attacks on those who receive them.

    If a pension is a "benefit" what is the billions handed to the banks - a bribe? A "fee"?

  • rate this

    Comment number 418.

    Its still too much. able bodied people should work for their benifit.

  • rate this

    Comment number 417.

    I care for my wife 24/7 as has a very rare muscle wasting condition, we struggle on the money we get as it is - how then does this encourage myself and my wife? Yet again more abuse from this government

  • rate this

    Comment number 416.

    Most of us are NOT fair minded. We are Class driven so we defend other peoples welfare cuts but not if it happened to us. It would be fair if we had 2.5 million jobs out there. When will the media in this fallen country show someone saying this. Don't hold your breath!

    A country that can cause death and destruction in Iraq will have little sympathy for its poor.

  • rate this

    Comment number 415.

    It’s very great news for Syrian Rebellion Army. The UK government will have enough taxpayer’s money to sponsoring them in Syria. But, government is still luck of money for proper housing of 500000 illegal immigrants for Home Office backlog. More cuts for British and more wasting on guests.

  • rate this

    Comment number 414.

    @ 391. SocialistNetwork

    Ahhh the psychology of the Working Class Tory voters .... etc .. blah faux intellectual soundbites ... blah.


    Ahhh socialists - I don't care if we are all in poverty as long as NOBODY is doing better than I am. Ready-set-marks race to the bottom....

  • rate this

    Comment number 413.

    My work contract ended on Friday with the NHS (they say NHS budget unaffected but not true, jobs going) and I have two interviews this week.

    Whilst not against changes to the current system, support for those with genuine health conditions back into work remains very poor, employers will reject those who have poor attendance - a very ill thought out policy yet again!

  • rate this

    Comment number 412.

    I think Ian Duncan Smith and his Tory pals are absolutely disgusting.

  • rate this

    Comment number 411.

    I wonder how many readers on this thread realise Benefit claimants will NOT actually receive £500pw in their pockets (as is MISLEADINGLY reported) as most of it ends up in the grubby hands of greedy Landlords?! That's the REALITY folks! So in REAL terms; the claimant's NET income is only £250pw or much LESS - in most cases! ;)

  • rate this

    Comment number 410.

    Your view is why i'm TOTALLY against benefit capping as it's simply to appease people like yourself! Don't you like your job? I do :) I get up at 5am :) I actually LIKE the idea that if people aren't working they might still be able to be happy :) If you don't like your job get a better one :) Better than 'punishing' those who don't work as you resent they might be happier than you!

  • rate this

    Comment number 409.

    To everyone here who thinks benefits payments are too much - I'd like to know what you think the structure of the benefits system is and the wealth of the recipients of it relative to those in employment.

    I would also like to know what share of all benefits payments you think goes exclusively to the unemployed.

  • rate this

    Comment number 408.

    £26k a year. I don't take that home and I'm doing alright thanks. If I had that coming through the door I'd have 4 foreign holidays a year and not 1.

    Disgraceful that these benefit breeders get more money then I do and I pay tax to help them do it.

  • rate this

    Comment number 407.

    2.5 million unemployed... about 275,000 vacancies... you do the maths... it really isn't difficult.

  • rate this

    Comment number 406.

    Very few Singletons get £350 you get £71.70 + Rent + Council Tax rebate roughly £30, so your rent would need to be

  • rate this

    Comment number 405.

    The system has been abused and abused basically with the knowledge sometimes of the authorities. People like me work more than 60 hours a week to make ends meet, no sympathy, no benefits. Then there are those living in mansions and never worked. Make them work for every penny in benefits.

  • rate this

    Comment number 404.

    367.And YES - I dont have a television - thanks
    You're working from the fundamentally wrong assumption that you have a right to other people's money. YOU DON'T!

  • rate this

    Comment number 403.

    I'm surprised by the 'Editor's Picks'. The article is referring to an upper limit, not an average.
    I'm not surprised. The Editor is clearly an IDS sympathiser who is trying to spin this story in the government's favour. Since he/she doesn't want you to know, IDS/DWP's claim is a big, fat lie;

  • rate this

    Comment number 402.

    It is a two tier system hyped up by book-promoting attention seekers like Owen Jones.

    The message is:

    Can't afford to live in the area you want to:
    Employed = hard luck
    Unemployed = 'attack on the poor'

    Can't afford another child:
    Employed = don't have one
    Unemployed = have as many as you like

    Not in your dream job:
    Employed = suck it up
    Unemployed = have cash whilst you find that perfect role

  • rate this

    Comment number 401.

    IDS has got you all at it again. Instead of complaining that £500 is too high as a cap because you don't get that in work after tax, perhaps you should fight with your union to get a living wage.
    IDS has successfully turned pleb against pleb by using the politics of envy, when the real culprits have got off with barely a slapped wrist, ie the bankers and those who rip you off with low wages.


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