A damning new study from Liverpool City Council has warned of potential “devastating social consequences” from the Government’s decision to lower the controversial benefit cap.

Government plans to reduce the total amount a household can receive in benefits, otherwise known as the benefit cap, come into force from 7 November 2016.

The change will see the benefit cap lowered to £23,000 in London (£15,410 single claimants) and £20,000 elsewhere (£13,400 single claimants).

People in receipt of working tax credit, pension credit, certain sickness and disability benefits, and carers allowance (from Autumn 2016), are exempt from the benefit cap.

But Liverpool City Council says the lower cap could put people at risk of losing their homes, with the average reduction in housing benefit for families affected by the policy around £44 per week, at a time when one in three children in the city are already living in poverty.

Cllr Jane Corbett, cabinet member for fairness, social inclusion and equalities at Liverpool City Council said the local authority are “really worried about the impact of the lower benefit cap”, and warned “it will tip some families over the edge”.

The council has promised an additional £600,000 for Discretionary Housing Payments to help families affected by the changes, but Jane says:

“Aside from the devastating social consequences and stress that this will cause, all it is doing is shifting the cost from the Government over to the council, housing associations and other partners at the same time as we’re facing cuts to our budgets”.

She added: “The truth is that the money saved on the benefits bill must be set against the cost to the public purse of paying Discretionary Housing Payments and housing families in temporary accommodation if they are evicted. Put simply it is a false economy.”

Work and Pensions Secretary Damien Green announced last month (September) that the government was deferring the imposition of a new cap on Local Housing Allowance – the equivalent of Housing Benefit for private sector tenants – for people living in supported housing until 2019-20, following opposition from charities and the Labour Party.

Opponents warned the proposals had already caused 80% of plans for new supported housing to be put on hold, while up to 40% of existing homes could be forced to close.

Labour’s Shadow Work and Pensions Secretary, Debbie Abrahams MP, said: “Kicking this decision into the long grass will only extend the anxiety of the tens of thousands of vulnerable people whose secure, supported accommodation faces closure, unless a full exemption from Tory cuts is put in place.”