From the TUC

Who will be hit by the benefit cap?

18 Mar 2011, by in Society & Welfare

The government’s plans to introduce a maximum limit to the amount of benefit a family can receive will hit the poorest families hardest and will overwhelmingly hit families with children.

From 2013, the most a family can get in benefits will be £500 for families with children and £350 for single people and couples without children. Last month the Department for Work and Pensions published their Impact Assessment for this policy. They still haven’t got round to assessing the impact on poverty, on different regions and nations, on women and men or different ethnic groups, but what is available is fascinating.

First of all, we now have a good idea of the scale of the impact: 50,000 families will lose an average of £93 a week, over half will lose more than £66 a week and 15 per cent (seven and a half thousand families) will lose more than £150 a week. Secondly, the cap will take money from children. Even though there is a lower limit for families without children, they will make up just 8 per cent of those affected. The other 92 per cent will be families with children. My back of an envelope calculation from the numbers in the Assessment is that something like 200,000 children will lose out.

Third, the number of affected children is so large because this is a policy that is aimed directly at large families. 42 per cent of the families who will be hurt by the cap will have five or more children, compared with 31 per cent with three or fewer.

We know from the government’s Households Below Average Income statistics that children in large families are more likely to be poor than children in small families.

In the table below, we show the risk of poverty for children in families with one child, two children and three or more children and we look at three definitions of poverty – living in a family with a low income that suffers from significant material deprivation, living in a family with an income below 60 per cent of the median for similar families measured before housing costs and benefits are taken into account and the same measure after housing costs are taken into account. Different measures produce different numbers, but the pattern is the same – it doesn’t make much difference to a child’s likelihood of being poor if they have one brother or sister but having two or more is associated with a substantially larger risk.

Risk of child poverty by number of children, 2008/9

Number of children in family

Low Income and Material Deprivation

BHC 60%

AHC 60%

One child

13%

19%

27%

Two children

14%

18%

27%

Three or more children

27%

31%

40%

Finally, the Impact Assessment says that 57 per cent of those affected will be lone parents. (In fact, a third of the families that lose out will be lone parents with five or more children). Again, we know that the children of lone parents are far more likely to be poor than children in couple families:

Risk of child poverty by status, 2008/9

Low Income and Material Deprivation

BHC

60%

AHC

60%

Lone parent

33%

34%

50%

Couple with children

12%

18%

24%

Given that we’re talking about families on benefits, it’s a pound to a penny that this association means that the change will hit poor families hardest, increase the number of children in poverty and increase the numbers in severe poverty.

3 Responses to Who will be hit by the benefit cap?

  1. PATRICK NARINE
    Mar 19th 2011, 8:04 am

    Dear Richard,

    Benefits and the minimum wage all ensure that the low paid, vulnerable and unemployed UK population are able to meet their basic living expenses. I therefore hope the government s considering these expenses including those listed below:

    Rent
    Council Tax
    Utility Bills
    Public Health
    Child Care & Care Costs
    Food
    Clothing
    Public Transport
    Education & Training
    etc.

    The vast majority of landlords only accept people who are in paid work or at college and university etc.

    Those who rent to the unemployed population, offer substandard accommodation for the same rent paid by working people living in high standard accommodation – a fact, as I experienced this discrimination, while desperately seeking accommodation as an unemployed person, including a demand for 6 months rent up front compared to one months rent demanded from an employed person!!

    I hope you will inform the government and the relevant organisations and media about this disgraceful, shocking discrimination and exploitation of the unemployed in Uk, who are NOT all drug addicts, alcoholics, criminals, in debt and unreliable rent payers who mistreat their landlord’s properties etc. as the large majority of them think!!!

    Thank you.

    Yours sincerely,

    Patick Narine
    Ecademy Power Networker
    http://www.ecademy.com

  2. Gareth Morgan
    Mar 26th 2011, 2:07 pm

    Aren’t you incorrect in your statement “From 2013, the most a family can get in benefits will be £500 for families with children and £350 for single people and couples without children.”

    The impact assessment says “Under this policy total household welfare payments (of working age households) will be limited to £500/week for couple and lone parent households, and to £350/week for single person households.”

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