Politics, The Benefit System

Benefits cap enters final stage

Benefits cap enters final stage

The benefits cap, which began to be introduced on the 15th April 2013, entered the final stage of implementation on the 12th August 2013[1]. The benefits cap is a limit on the amount of cash benefits that can be claimed by a single family. The cap has been set at £500-a-week (£26,000 a year) for couples and lone parents and £350-a-week (£18,200) for single people without children. The cap includes most large benefits, such as Housing Benefit and the Universal Credit*, though excludes many others, such as the Personal Independence Payments (PIP)**[2]. It is one of the government’s most popular policies, with a recent YouGov poll suggesting 79% of the public support the cap, with large and consistent majorities in all parties. 40,000 families will be affected by the changes[3].

Proponents have argued that the cap is a necessary reform to make the welfare system fair. The cap will ensure that no family earns more than average household income through welfare benefits. The government argues that this is fair[4]. Last month the Chancellor considered lowering the maximum amount from £26,000 to £20,000 if the policy is shown to work[5]. The policy will also save £110 million a year.[6]

Opponents have argued that the benefits cap is set at an arbitrary amount, will not tackle underlying worklessness and penalises large families. The cap will disproportionately affect households living in areas with high house prices, such as London, but will do nothing to tackle the root of the issue (high house prices)[7]. The cap will also disproportionately affect households with children in them (89% of the affected households have children in them)[6][7]. Households with large numbers of children are also disproportionately represented in the figures.

* Bereavement Allowance, Carer’s Allowance, Child Benefit, Child Tax Credit, Employment and Support Allowance (except where Support Component has been awarded), Guardian’s Allowance, Housing Benefit, Incapacity Benefit, Income Support, Jobseeker’s Allowance, Severe Disablement Allowance, Universal Credit (except childcare element), Widowed Parent’s Allowance and Widow’s Benefit

** one-off payments, non-cash benefits, free school meals, Council Tax Benefit, Disability Living Allowance (DLA), Personal Independence Payments (PIP), Attendance Allowance, Constant Attendance Allowance, Industrial Injuries Benefit, Working Tax Credit


  • Is a cap fair or arbitrary? Which level should the cap be set at?
  • Which benefits should be excluded or included in the cap?

By Will Archdeacon

Quoted links

[1] https://www.gov.uk/government/news/benefit-cap-final-stage-starts

[2] http://www.housing.org.uk/policy/welfare-reform/benefit-cap

[3] http://d25d2506sfb94s.cloudfront.net/cumulus_uploads/document/wx73df9itw/YouGov-Survey-Sun-on-Sunday-Welfare-and-benefits-130404.pdf

[4] https://www.gov.uk/government/news/national-introduction-of-benefit-cap-begins

[5] http://www.bbc.co.uk/news/uk-politics-23325667

[6] http://www.bbc.co.uk/news/uk-21706978

[7] http://www.newstatesman.com/politics/2013/07/five-things-iain-duncan-smith-doesnt-want-you-know-about-benefit-cap

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