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 460.

    Not only a cap on the amount, but a limit on the time it is paid for. Benefits are there to help the claimant to get a job, better job, etc,not to choose to continue to claim. There should be a set time limit for each benefit and no reclaim within 12 months.

  • rate this

    Comment number 459.

    Sad thing is that if any of the spongers out there are affected by the benefits cap then it will be their children who suffer. Not because of the drop in income but because Cigs, Booze and Scratchcards will always have a higher priority to these people!

  • rate this

    Comment number 458.

    The Benefit Cap is the right thing to do. I have no sympathy with people who have large families and then expect the rest of UK taxpayers to fund them. Duncan Smith should have gone further and stopped ALL Child Benefit for any more than two children. This could be announced and post dated to 9 months time. This would not harm anyone currently but save millions over the next decades.

  • rate this

    Comment number 457.

    The landlord gets the vast majority of any so called benefits anyway.

    Our Taxes are making a few landlords very rich.

    "Kevin Green estimates his current wealth at just shy of £40m. "I don't go for yachts but I do have an Aston Martin and a Rolex," he says.

    "About 60% of the rent he receives comes from tenants on housing benefit and income support."

  • rate this

    Comment number 456.

    I still do not like that people can claim benefits to an amount close to what people who are on 30k get after tax. These people will never dream of looking for a job as they will always be worse off than they would be claiming.

  • rate this

    Comment number 455.

    Yes we need a cap (1) a cap on the exorbitant rents in the private sector (2) a cap on the immigrants coming into the country and taking what jobs are available and claiming benefits ie working credit and child benefit and sending it home and (3) a cap fixed at the same level on MP's salaries and expenses and banker's bonuses.

  • rate this

    Comment number 454.

    The cap doesn't encourage job seeking at all and it's not designed to do so. It's all part of the shrinking of state provision - the Tories are doing all right - in IDS' case, he married money - and they don't want to contribute to those who aren't. Very few get the maximum amount, the majority on benefits are in work, hardly anybody 'scrounges' or cheats, the savings are tiny. Go figure.

  • rate this

    Comment number 453.

    Stupid pinko society.

    Why do we pay for housing for those without the nous to do so themselves?

    Too expensive where you live? Move, like workers have to.

    Can't afford your house? Then share. Like young professionals have to.

    Can't afford to feed your family? You were irresponsible to have children in the first place.

    Personal and familial responsibility.

    Man up wet pants.

  • rate this

    Comment number 452.

    As a modern caring society we all have an obligation to provide a safety net to those amongst us that fall on hard times. Unfortunately that safety net has become a blanket and a duvet to the feckless and idle. The only way to get the whole system under control is to make it contributory, so that nothing paid in means nothing paid out. Ending the something for nothing society we have created..

  • rate this

    Comment number 451.

    I have got on my bike and move twice for work (in 1996 and 2009). This time, I have a child half way through their GCSEs… So is your suggestion reasonable?

    BTW, I have a cunning plan of moving when they finish.

  • rate this

    Comment number 450.

    Then what. oh great Plutocratic leader?

  • rate this

    Comment number 449.

    I would like to ask Mr IDSmith whether there is any intent to cut the farm subsidy , which is granted on acreage alone & which he himself has benefited from to the tune of £1.5m over the last 10yrs .
    Will the resulting cut affect his standard of living.
    Although not his responsibility he knows a man who has it!

  • rate this

    Comment number 448.

    Well If I told you I what I earn, no doubt you would employ that other alternative and worn out cliche about being a Champagne Socialist.
    But the difference between me and you mate is that I look up the social ladder and ask questions. You on the other hand look down the ladder to spit and sneer at the people who are only a few rungs below yourself.
    How big of you.

  • rate this

    Comment number 447.

    Typical headline grabbing ideological rubbish which affects a tiny minority of families wholly dependent on benefits, and designed as always to pit the low paid against the unemployed. Yes, we need a benefit cap BUT...1) A rent cap 2) A new national minimum wage, enforced & higher than current 3) Secure, long term employment enabling people to pay bills, mortgages etc.

  • rate this

    Comment number 446.

    We don't need a cut, we need a scythe

  • rate this

    Comment number 445.

    Information for the ignorant. Some of these people work, but their jobs are in Central London and they are still on min wage. It would cost them too much to commute from cheaper areas so they have to live in high rent areas. So who will do the cleaning and similar work if they move away? True there are also some lazy parasites. But don't assume everyone is a lazy scrounger.

  • rate this

    Comment number 444.

    The government should go further still. No one should get more in benefit than the minimum wage. Why should unskilled people with nothing to offer get more money on benefits than those who have studied, learned a trade, work hard and only just above the minimum wage?
    It's still a scandal. £500 a week tax free and no expenses incurred in obtaining that money. It's a joke and should be stopped.

  • rate this

    Comment number 443.

    Some people here have missed the point, yes many do not claim the full £500 and no one said it was easy on JSA or other benefits.

    The fact still remains that many are going to work and come home to see our neighbours in the same homes as us simply enjoying their 'working time' 24/7- Don't blame those who work for this blame those who for generations have lived off abused the system.

  • rate this

    Comment number 442.

    @ 7. UnCivil_in_NY

    That 'Cap' is dangerously close to what I take home after taxes from my paying job.


    How many people do you support of that wage though? Many claimants who previously received £500+ had many dependents. And don't say they shouldn't have children then as they may have had them before having to claim.

  • rate this

    Comment number 441.

    That a ceiling of £26000pa, enabling those in receipt to live very comfortably at the expense of working taxpayers, is reprehensible.

    No wonder these people don't want to work. Why bother, when you know your income is tax-free and more or less guaranteed, particularly if you keep having more children just to qualify for bigger homes and more money to put them into nurseries at others' expense.


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