107,000 families hit by ‘cruel’ benefit cap as winter bites and energy prices soar

UK government urged to scrap benefit cap and two-child limit policies.

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The Department of Work and Pensions (DWP) has released new data indicating that 107,000 households face increased expenditures this winter due to the capping of their benefits. 56,000 have kids aged under five.

According to new FOI-based figures from the Nuffield Foundation-funded Benefit Changes and Larger Households study, more than 32,000 of these capped families (over 110,000 children) are also subject to the two-child restriction legislation.

Child Poverty Action Group (CPAG) and the Larger Families initiative warn that the combined effect of these two measures forces families to make insurmountable decisions when winter living costs increase.

A new report from Larger Families shows the hardships already endured by families subject to both the cap and the two-child restriction, which further impoverishes children.

Families with young children are especially vulnerable to the cost-of-living crisis due to rising energy costs – especially as temperatures fall – but the government’s response to date has failed to recognise this through its emergency cost-of-living payments, which are flat-rate and offer no more to those with children than to those without.

And while the government defends the benefit cap on the grounds that it creates a work incentive, today’s DWP figures reveal that over half of capped families (52%) include children under the age of five, and 23% include children under the age of two, making it clear that the ability of affected families to reach the earnings threshold to escape the cap is significantly constrained when caring for young children.

Meanwhile, even if families subject to both the cap and the two-child restriction earned enough to be exempt from the cap, the two-child limit would still apply, leaving them without up to £2,935 per year in assistance for their third or subsequent child.

The benefit cap restricts the total amount of assistance that low-income or non-working households can receive. The maximum is now £384 per week for families living outside of London and £442 per week for those living in London.

Like many benefits, the cap will be increased by 10,1% in April. This will be the first time the cap has been increased since its inception in 2013, and it will remain well below its initial figure.

The two-child restriction restricts child allowances in universal credit and tax credits worth £2,935 annually to the first two children in a household, unless the children were born before April 6, 2017, when the regulation took effect.

Kitty Stewart from the Larger Families project said: “These policies are pushing households with very young children deeper into poverty. This is especially worrying because we know that the early years of childhood are a critical time for children’s development.

“Many of the parents we have spoken to face considerable barriers to work, including health issues in the family as well as having very small children. Our social security system is letting them down just at the time they most need support.”

Commenting when the DWP figures were released, Child Poverty Action Group chief executive Alison Garnham said: “The children behind today’s statistics need food and warmth like all kids. But with the two-child limit and benefit cap, government will ignore their needs this winter.

“The policies make it almost impossible for parents to provide the basics. If all children matter – not just some – these cruel policies must be removed before they damage more young lives.”

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