Nearly 50,000 low-income families caring for an estimated 126,000 children are at risk of serious financial hardship after being trapped for the first time by the lower benefit cap, official figures show.
More than half of the families hit by the cap will face a shortfall of over £50 a week as a result of the cap, which limits the level of benefits payable to unemployed households. About 13% will lose between £100 and £150 a week, while more than a thousand households will lose between £200 and £300 a week.
After families already hit by the older benefit cap are taken into account, 66,000 households overall, including 197,000 children, were capped in February 2017, a threefold increase on November figures, when the previous cap was in place. Charities said the figures heralded an anticipated rise in child poverty and would exacerbate a growing homelessness crisis.
Nearly three-quarters of those capped were single-parent families, three-quarters of which had at least one child under five. Nearly one in six single parents capped had a child aged under one.
The lower cap, which was rolled out across the UK between November and the end of January, limits total household benefits to £23,000 a year (£442 a week) in London and £20,000 outside the capital (£385 a week).
Matthew Reed, chief executive of the Children’s Society, said: “It is deeply worrying to see that hundreds of thousands of children have been hit by the new benefit cap, cutting the money needed to keep a roof over their heads. Our concern is that this will only worsen child poverty, which is already set to balloon to 5 million by the end of the decade. While we think it’s right that work pays, it is children who are bearing the brunt of the cap.”
A Department for Work and Pensions spokesperson said: “Since the benefit cap was introduced, around 29,000 households who previously had their benefits capped have moved into work – an increase of 3,000 in the last quarter. Anyone eligible for working tax credits, carer’s allowance, and most disability benefits are exempt from the cap.”
Although the cap is presented by ministers as an “incentive” to persuade those on benefits to either take a job or work more hours – because this would exempt them from the cap – the statistics show the vast majority of those affected by the cap are either not required to work or unable to work.
Just 16% of those capped in February were on jobseeker’s allowance. Almost four in five households were claiming income support because they had young children and were not expected to seek work, while one in six were claiming employment support allowance, suggesting that they had been assessed as unfit to work.
MPs presented evidence earlier this week saying that while capped households suffered “drastic and abrupt” changes to income as a result, many were unable to work even if they wanted to because of lack of accessible and affordable childcare, forcing them to cut back on food and other essentials.
The latest statistics also reveal how the lower cap has brought two- and three-child families across the UK into the scope of the cap, which in its first iteration impacted mainly on large households in high-rent areas such as London. The south-west, south Wales and Greater Manchester have all seen big increases in capped families.
Alison Garnham, chief executive of Child Poverty Action Group, said: “This was always a policy more about looking tough than enabling families to work or be better off. The next government should face the evidence that its only significant effect has been further impoverishment, and put the policy aside.”
Rosie Ferguson, the chief executive of Gingerbread, the single-parent support charity, said: “Worryingly, the majority of those affected are families who will find it hardest to escape: single parents with very young children, when childcare is most expensive and the lack of flexible jobs felt most strongly.”
Chartered Institute of Housing policy and practice officer Sam Lister said: “We remain seriously concerned that the benefit cap could have a severe impact on the families affected, make housing in large sections of Great Britain unaffordable and risk worsening what is already a growing homelessness problem.”
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