Government urged to scrap ‘cruel and irrational’ benefit cap

"It must be abolished before it harms more children," poverty charity says.

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Unless the benefit cap is increased, households subject to the benefit cap would be £65 worse off in April than they would be if they were not capped, according to new data by Child Poverty Action Group (CPAG).

When benefits are increased in April, 120,000 already-capped households will receive no further assistance to cover rising expenses.

Due to the cap, an additional 35,000 who will be freshly capped in April will only receive a portion of this increase.

CPAG’s study reveals that the great majority (94%) of currently capped families are capped only because the level of the limit has been fixed for six years.

The restriction limits the total amount of benefits that low-income and non-working households can receive to £383 per week outside London and £442 per week in London. It was established in 2013, decreased to its present amount in 2016, and has remained unchanged since then.

Consequently, the number of capped households has increased over time, while those who were previously capped have seen a widening income-to-costs gap.

Capped homes are among the poorest families in the country. A typical couple with two children and a cap is £150 per week below the poverty level.

In light of the present cost-of-living issue, removing the limit would result in an average increase of £65 a week in the pockets of capped households.

The removal of the benefit cap would cost £500 million, or 0.2% of overall social security spending.

Had the cap been adjusted with inflation since its establishment, it would have been £640 per week in 2023/24, £200 per week higher in London and £260 per week higher outside of London.

The difference between the real cap and an increased cap will expand by £60 per week this year alone.

The Child Poverty Action Group is requesting that the incoming prime minister remove the limit.

The charity’s chief executive Alison Garnham said: “The benefit cap is cruel and irrational at the best of times – many parents subject to it can’t escape it by working more because they are caring for very young children and housing costs are completely out of their control.

“But in the current crisis its effects will be truly catastrophic for hundreds of thousands of children, pushing many into deep poverty.

“It is early days for the new government and scrapping the cap would send a clear signal to families that the PM is on their side – there can be no doubt that leaving it in place will damage the lives of children up and down the country.

“It must be abolished before it harms more children.”

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