During 2013 the Government will be rolling out a series of benefit reforms. One of these will affect the amount of money that benefit recipients will receive in their pockets every week. The Welfare Reform Act gives the government the opportunity to cap the total benefits that an Individual can receive. It will combine many benefits (outlined below) into a single payment and will set a limit on the amount that an individual can receive . It will not affect disability benefits. For example,
… households where one member is in receipt of Disability living allowance will be unaffected by this procccess. These benifits will be covered by their own set of reforms. In addition, It will not affect those families who are in receipt of Working Tax Credit. Moreover, those households that claim the various forms of attendance allowance will be exemptied from this reform. This reform will affect the following benefits; (also see http://www.housing.org.uk/policy/welfare_reform/overall_benefit_cap.aspx)
- Bereavement Allowance
- Carer’s Allowance
- Child Benefit
- Child Tax Credit
- Employment and Support Allowance (contribution-based and income-related) except where the Support Component has been awarded
- Guardian’s Allowance
- Housing Benefit
- Incapacity Benefit
- Income Support
- Jobseeker’s Allowance (contribution-based and income-based)
- Maternity Allowance
- Severe Disablement Allowance
- Universal Credit
- Widowed Parent’s Allowance
- Widow’s Benefit
The scheme began with a pilot scheme in four London boroughs; Bromley, Croydon, Enfield and Haringey. It will be rolled out nationally during the summer months from July to September. Claimants, residing in the four boroughs will see their benefits capped to £500 a week (for a couple) and £350 (for a single individual). The Department Of Work And Pensions estimate that
about 56,000 households will be affected by the measure in 2013/14 rising to 58,000 in 2014/15.
The Government says that the reform will make the benefits system clearer, fairer and provide an incentive for people to work. Ian Duncan Smith said;
The benefit cap sets a clear limit for how much support the welfare state will provide – the average wage for working households. But it’s also a strong incentive for people to move into work and even before the cap comes in we are seeing thousands of people seeking help and moving off benefits. We have a very clear message: we will provide support to those who need it, but the days of outrageous claims giving people incomes far above those of working families are over.”
However, its critics argue that the cuts will fall disproportionately on those families living in expensive areas. It has also been seen as unfair to large families with larger bills and higher expenses. Anne Longfield OBE, Chief Executive of 4children has said;
From today hard working families with children across the UK are facing real terms cuts in their incomes as the benefits and tax credits on which they rely are raised by just 1% – a third of the current rate of inflation. This in stark contrast to the experience of pensioners, who last week rightly benefitted from a ‘triple lock’ which saw their pensions rise by 2.5%. Families with children are some of the hardest hit by austerity, with many cutting back on basic essentials and now more worried about paying the bills than about violent crime. The government talks a lot about family but this risks sounding like just warm words. The government has a golden opportunity to put the money where its mouth is at the Comprehensive Spending Review – when mums and dads up and down the country will be looking to see if the Chancellor is being Fair4Families.”
What do you think: Are these a necessary reform of a broken system or a series of cuts that will make the poor poorer?
By Victoria Richards
Links
http://www.workingmums.co.uk/working-mums-magazine/news/6849618/benefits-cap-introduced.thtml
http://www.ifs.org.uk/publications/6012
http://www.guardian.co.uk/commentisfree/2013/apr/15/benefits-cap-not-address-affordable-housing-crisis
http://www.housing.org.uk/policy/welfare_reform/overall_benefit_cap.aspx
