Parliament knows about the effects of the benefit cap, but the Conservatives plan to make them worse..

The Impact of the Benefit Cap.

The Welfare Reform Act 2012 provided for a cap on total household benefits. The cap limits the total benefit a household can receive to £500 per week for a family and £350 per week for a single person with no children. The difference between a claimant’s total benefit and the Cap level is subtracted from Housing Benefit, or from support for housing costs under Universal Credit. The Cap was initially piloted in four London boroughs from April 2013 and was then implemented in all local authority areas in Great Britain by spring 2014.

The Parliamentary work and Pensions committee reported on the effects of the benefit cap last year. I copy some of their evidence below.

The current conservative government does not plan to act on any of this. Instead the plan is, if re-elected, to further reduce the total amount people can receive in benefits, regardless of the widespread and serious problems this is causing to vulnerable people and families.

 

The impact of the Benefit Cap on affected tenants

96. As of January 2014, 38,600 households had been affected by the Cap. Those most likely to be capped were families with several children, and those who live in high rent areas or expensive accommodation (such as temporary accommodation). Almost half of all capped households, 47%, were in London. Of households subject to the Cap in January 2014: 60% contained between one and four children and 36% contained five or more children. 59% were single-parent households with children.[99]

97. Witnesses expressed concerns regarding the large proportion of income that affected households were losing. The average loss differed between different areas. In Newcastle, the average loss among the 56 affected households was £48pw, with six households losing in excess of £100pw (reducing their Housing Benefit to less than 50p weekly). Z2K, a London-based charity, found that tenants were losing between £5 and £500pw, with an average loss of £91pw. According to the DWP, 22% of all capped households are losing more than £100 per week as of January 2014.[100]

98. The Chartered Institute of Housing, and Haringey Council, were concerned that reductions in income arising from the Cap could lead to poverty for affected claimants. They were particularly concerned about the effect the Cap could have on levels of child poverty.[101] The Children’s Society provided calculations, illustrating the way in which the Cap might affect the poverty level of families in private rented housing under Universal Credit:

Table 3: Disposable income after cap applied for out of work couple with average private rental sector rent for relevant property sizes[102]

Average PRS rental prices Disposable income after cap applied Poverty line (after housing costs deducted)
1 child £146 £196 £272
2 children £175 £261 £367
3 children £175 £325 £413
4 children £236 £264 £508
5 children £236 £264 £553
6 children £236 £264 £649

The Cap and relocation of affected tenants

99. Witnesses told us that some tenants affected by the Benefit Cap were being made homeless as a result of accruing unmanageable levels of arrears. Yvette Burgess of the Coalition of Care and Support Providers in Scotland said that placing homeless people in the private sector had become more difficult and expensive for local authorities because the Benefit Cap had reduced the range of affordable properties. The London Borough of Brent said that it was having to look “further afield” for affordable accommodation. However, moving people out of London could cause increases in rents in other areas: according to Z2K, private sector rents were starting to go up in areas such as Enfield where inner-London based local authorities were placing people.[103]

100. There is evidence that some private sector landlords have specifically been evicting or ending tenancies of people on Housing Benefit because of fears they might be affected by the Cap. The London Borough of Brent reported that evictions of private sector tenants due to the Benefit Cap were causing an increase in homelessness. Joanna Kennedy of Z2K said that currently around 18% of private sector landlords were renting to tenants on Housing Benefit, while two years ago the proportion was closer to a third. She cited a survey which found that “57% of landlords actively said that they would not take Housing Benefit tenants”.[104]

The parliamentary committee report goes on to itemise the effect of the cap on disabled people and carers, on its especial effect on people forced to live in expensive temporary accommodation as a result of homelessness, and to dispute the number of people the government claims has gone into work as a result of the cap.

Access this report through the House of Commons Website here http://www.publications.parliament.uk/pa/cm201314/cmselect/cmworpen/720/72007.htm

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4 thoughts on “Parliament knows about the effects of the benefit cap, but the Conservatives plan to make them worse..

  1. Look over on speye. Letters show that the government knew that the cap would not save money actually adding costs along with 20,000 people being made homeless; they have also been warned that the new cap level would lead to a further 50,000 people being made homeless.

    So if it doesn’t save money conversely costing money and leads to massive homelessness, one needs to ask just what would be the underlying reason for pursuing such policy.

  2. Do my eyes deceive me, but here is an article in the Tory newspaper about austerity hurting the poor
    http://www.telegraph.co.uk/news/uknews/11374303/Newcastle-upon-Tyne-a-modern-city-sinking-under-austerity-cuts.html

    TUC tell us that over 90 per cent of new claims for housing benefit since 2010 have been to those in work, with UK the 3rd highest accommodation costs in Europe.

    Benefit cap will not be the full amount for all of the UK. Maximum only for London, with regional caps less.

    Universal credit will absorb housing benefit, and talk of also council tax support, and will affect the part time working poor either waged or low income self employed as well as UC absorbs working tax credits.

    Part time workers will be sanctioned for failing to reach full time hours.

    Sanctions will become permanent as Hardship Payments become recoverable loans under UC by direct deductions by court action against your future benefit or wages.

    VOTE DIFFERENT – SOLE WAY TO END AUSTERITY IN 2015

    Small parties are bigger than all other parties.

    Labour has already lost as only neck and neck with Tories.

    Predictions are Labour on only about 277 MPs with Tories on only 264 MPs, and Lib Dems reduced from 50 odd to a mere 28 MPs, which is about the same as the small parties put together as 21 MPs.

    Small parties getting nil media coverage, when sole way to bring out the 75 per cent poor vote, who otherwise will vote for no party.

    No party won in 2010. Most people did not vote.

    http://www.anastasia-england.me.uk

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