Widening the net and twisting the knife: the benefit cap gets worse

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Today sees the benefit cap – the limit on total benefits which households can receive if no-one works at least 16 hours a week – fall from £26,000 a year to £20,000, or £23,000 in London. The 20,000 or so families currently capped will see their housing benefit reduced overnight by £500 or £250 a month, starting from today. That’s a huge amount to expect people to find from their other income, but most will have to do that or risk losing their home. For new households, the cap will be introduced in phases starting with local authorities with the fewest affected households and finishing with those with the most (such as Birmingham) in February 2017.

The numbers affected by the cap will rise significantly – the government estimates that 88,000 households will now be capped, but the Chartered Institute of Housing put the figure at more than 116,000. The cap will continue to affect more children than adults – more than 319,000 according to CIH estimates, of whom most will be in families with two or three children. Currently two-thirds of capped families are single parents, mainly with very young children: according to the government’s latest data, in August 2016 78% of capped lone parents had a child under 5, and 17% had a baby under one. More than half of capped families are expected to be single parents of children under 5 under the lower cap too, according to Gingerbread. It’s not surprising that parents in this group are relatively unlikely to work, when you consider the needs of very young children and that there is no free childcare provided for under-2s, and currently only 15 hours per week for two-to-four year-olds. There is no government requirement for them to work to claim income support.

The cap also affects people who are unable to work due to disability or ill-health but who have been assessed as able to undertake ‘work-related activity’ (those with more severe conditions are exempt). Of households capped in August, just 14% were claiming jobseeker’s allowance, i.e. in a position where they are expected to seek work. Yet the only escape from the cap is to take up work of at least 16 hours a week.

Until now, people caring full time for sick, disabled or elderly relatives were also absurdly affected by the cap. As of today, the government has introduced a very welcome exemption for this group (those claiming, or entitled to, carer’s allowance) as well as for those claiming guardian’s allowance (family members caring for children who have lost their parents). But it has failed to extend the same logic to other groups who should not be expected to work.

The only other way to become uncapped is to move house somewhere cheaper. Yet Shelter has calculated that a family with two young children will not be able to find a home in 60% of the country – including the entire southeast and southwest regions – which would be cheap enough for them to escape the reduced cap. A family with four children will find the entire country unaffordable.

The IFS found in 2014 that ‘the large majority of affected claimants responded neither by moving into work nor by moving house’. Indeed a government report from December 2014 showed that more capped families had cut down on spending on essentials (35%) than had looked for work (28%). If families cannot cut down enough to meet the shortfall in their rent after their housing benefit is capped, they may eventually lose their homes. Discretionary housing payments are available for some, but the budget is limited and they are by their nature temporary and not guaranteed.

The evidence is there that this policy leads directly to babies, toddlers and children – as well as people with ill health and disabilities - losing out on good food, warmth and a secure home. These are groups who ought to be given the strongest possible protection against this kind of deprivation, and we should be incredulous and angry that it is about to be inflicted on many more families, and much more cruelly than before.

Just last year, the Supreme Court found that the benefit cap was in breach of the UN Convention on the Rights of the Child. The judgement stated that ‘the prejudicial effect of the cap is obvious and stark. It breaks the link between benefit and need… It cannot possibly be in the best interests of the children affected by the cap to deprive them of the means to provide them with adequate food, clothing, warmth and housing, the basic necessities of life’.

How much stronger would these words have been if the cap had been £6,000 lower? Whether or not their parents can or do work is in the end not the core issue. Our children deserve a lot better than this. 

Comments

Thank you

Dear Josephine,
an excellent article, thank you. I read through the Post-implementation effects of the Benefit Cap (wave 2 survey)that you linked to in your report and it makes interesting reading.

Quote: For those with families [looking for work], the cost and/or availability of childcare is perceived to be a considerable barrier to finding paid work. In particular, around half of lone parent families and women cite this as one of the main barriers they face (53 per cent and 49 per cent respectively).

Do you have any suggestions as an organisation as to how families can overcome this hurdle? Does the support exist but people are not finding it?
Rgds,
Mark.

By Anonymous
Mon, 2016-11-07 13:19

Thank you - reply

Dear Mark,

Thank you, I'm glad you found the blog interesting.

CPAG's experience shows exactly the same thing: many parents would like to work or progress in their job, but are held back by a lack of affordable childcare.

There is some support available, and information about various schemes is available here: https://www.gov.uk/help-with-childcare-costs/approved-childcare.

The government provides 15 hours/week free childcare for all three and four year-olds, and for two year-olds in disadvantaged families. Next year this will be increased to 30 hours for three and four year olds whose parents work, which is good news.

However these hours are only available for 38 weeks/year (term times) or the equivalent, which still leaves a big gap in the holidays. Also 15 hours/week doesn't cover the 16 hours that parents have to work to escape the benefit cap, plus travel time to/from work. And there is no free childcare at all for children under 2, whose parents can still be capped.

Parents can also claim a partial subsidy for childcare fees through tax credits (70% subsidy) or universal credit (85%). This is obviously a big help, but paying the remaining amount can still be difficult for some families.

As the lower benefit cap rolls out, local authorities will be looking at what they can do to help affected families, including with childcare. So affected families should definitely ask whether any help is available locally too.

I hope this is helpful - please do get in touch if you need any more information.

Best wishes,

Josie

By Josephine Tucker
Fri, 2016-11-11 12:10

ben cap

A further hurdle to work is ageism. To have four or more children requires a certain age, and employment opportunities for redundant 50+ workers are stark indeed. After three years ardent job seeking on the benefit cap, I seriously doubt I shall ever be employed professionally again, and what zero hours contracts I find often doesn't reach the £430/month net income required to cancel the cap: Wish they hadn't made pensions mandatory since this cuts into my net pay.

By Anonymous
Tue, 2016-12-06 05:23