From the TUC

The Impact of the Benefit Cap

07 Aug 2013, by in Society & Welfare

Figures out today show that the benefit cap is hitting exactly the people we said would be worst affected: large families, lone parents and, overwhelmingly, children.

In April, the cap (a maximum amount of benefit per family, whatever their level of need) was introduced in four London boroughs. Today, the Department for Work and Pensions published figures on who has been affected in those boroughs (in July the cap started gradually being extended across the country, but these figures are only for the 4 pilot boroughs). These figures show:

  • 74% of the families hit by the cap are lone parents and their children;
  • 74% have three or more children; and
  • Over 97% of the families hit are families with children.

The figures also show that more than 60% are losing over £50 a week; 31% are losing more than a hundred pounds a week. Let’s just think for a minute about what this means for those families. For the most part, these are families who are put over the cap by the Housing Benefit they need to pay their rents – their disposable incomes, the money they have to spend on food fuel and other living costs is pretty limited. In the short-term, £50 or more out of their disposable incomes will mean real hardship – we know that parents on benefits often go without to stop their children suffering, but when the cut is this big, their ability to protect the children is going to be limited. So the first impact will be to increase the number of deprived children – we can expect to see a lot more children doing worse at school because they haven’t had any breakfast.

The only response open to many families will be to move to somewhere with cheaper rent, so the Housing Benefit comes down, bringing them below the benefit cap. There’s one obvious problem with this: lower rent areas often have fewer jobs, so their chances of escaping by leaving benefits will go down and, for the majority who are lone parents, moving away from networks of family and friends who might have helped with childcare will make getting a job even harder (this help will be even more important nowadays, when childcare is getting more expensive and the help available from tax credits has been cut.) For any parent the really upsetting thing about what will happen next is the knowledge that pupils who switch schools in-year do worse in exams – and this process hits poorer children hardest.

And finally … a health warning. Today, the government also published figures for Jobcentre Plus activity regarding claimants who have been identified as potentially impacted by the benefit cap. This shows that, on 19 July, there were 25,600 claimants who had been warned that they might be affected who were taking part in JCP employment support and that 14,000 claimants who had been warned had moved into work. If past experience is anything to go by, we can expect to see claims that these are people who had been avoiding work, but finally decided to get a job when prodded by the benefit cap. As we will no doubt have to repeat every time a new edition of these statistics is published, these figures show nothing of the sort, unemployed claimants are moving into work all the time. I imagine the DWP’s statisticians, told to produce these reports getting more and more angry at the way they’re used. That’s certainly how I read the safety notice they’ve inserted immediately after these figures:

Important: The figures for those claimants moving into work cover all of those who were identified as potentially being affected by the benefit cap who entered work. The statistics are not intended to show the additional numbers entering work as a direct result of Jobcentre Plus support. These statistics do not include information on the duration or type of work.

One Response to The Impact of the Benefit Cap

  1. The Benefit Cap’s Shaky Foundations | ToUChstone blog: A public policy blog from the TUC
    Aug 8th 2013, 2:27 pm

    […] is unlikely to retreat, even though the DWP’s own figures (discussed yesterday in Richard’s post) show that the biggest losers are children in poor families. But is the basis of the benefit cap as […]