Imposing a cap on benefits as an incentive to get them to go to work instead is a ‘fallacy’ which is causing young children to go hungry, a poverty campaign group has claimed, after new research has discovered hundreds of families in Bristol who are subject to the benefits cap can’t work anyway.
And scores more families in Bristol who are having their benefits capped are in work anyway - but are so poorly paid they don’t earn enough to be exempt from it.
The Child Poverty Action Group said its new research from Government figures has ‘debunked’ the reasons ministers have always given for imposing a cap on benefits - that it will persuade people to get a job instead - because almost half the people it applies to have already been assessed as not able to work, because they are looking after young children.
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The benefit cap limits the amount of benefits that non-working or low-earning households can receive to £384 a week, if they live outside London. It applies to anyone who earns less than £658 a month in a part-time or low-paid job, the aim from Government ministers is that by capping the amount of benefits someone receives, they are incentivised to go out and work more hours.
But Government figures obtained by the Child Poverty Action Group show that there are 800 households in Bristol that the benefit cap applies to, and of those, 350 are people caring for children aged under three, and therefore exempt from job search requirements by the DWP. Another 160 are already working, but earning too little to be exempt.
The Child Poverty Action Group charity said the new data ‘debunks the DWP’s defence of the cap as an encouragement to work’, since so many of the very same families the department caps it also assesses as not expected to seek work.
“Our data demonstrates the fallacy that the benefit cap is a work incentive,” said Alison Garnham, the chief executive of Child Poverty Action Group, who called for the cap to be scrapped.
“How can it be when so many Bristol households caught by it are unable to take a job because of young children? It doesn’t incentivise work, it leaves children hungry. The Government’s position on the cap is incoherent. It must be removed before it harms more young lives,” she added.
The figures obtained by CPAG show that In Bristol the benefit cap cuts the universal credit of affected families by on average £230 a month, pushing an estimated 2,300 children deeper in poverty. Almost all the 800 affected households on universal credit in Bristol contain children - some 97 per cent of them - including 650, or 81 per cent, in single parent families.
“The benefit cap removes vital support from families just when they need it most,” said Dr Kitty Stewart, an Associate Professor at the London School of Economics who researches child poverty.
“These figures show the policy makes no logical sense – it urgently needs to be removed before it does further damage to children’s lives,” she added. “It is particularly difficult for single parents to earn enough to escape the cap as they need to reach the earnings threshold and cover childcare costs singlehandedly,” she said.
There is a particular problem with the way people on part-time income are paid and how it affects their benefits, the research also showed.
“The £658 threshold to escape the cap is equivalent to the monthly earnings of someone working 16 hours a week at the national living wage,” explained a Child Poverty Action Group spokesperson. “But many low earners are paid on a four-weekly cycle. This means that when universal credit entitlement is assessed, only one pay cheque for four weeks' earnings is counted in a calendar-month assessment period, even though a claimant's earnings taken over a calendar month are enough to be exempt from the cap,” she added.
Faduma is a single mum in this situation. She loses £320 a month through the benefit cap despite working 16 hours a week because she is paid on a four-weekly basis. If she worked one more hour a week her earnings would pass the threshold but the agency she works for says there is nothing available.
“They told me … if you look [for] one hour extra, you’re not gonna get benefit capped…I told [the agency] but they said it’s a waiting list, when we get more jobs available we can give it to you, and I’m just waiting,” she said.
Alisha, a single mum, is unable to work enough hours to escape the cap because her employment options are restricted by school hours and childcare availability - something that affects hundreds of other single parents in Bristol. “There’s nothing I can do, I can’t fix this situation; even if I put this one in childcare and try to get a job, I can still only get a job three days a week while the other two are in pre-school, there isn’t enough hours there; and again I still have to do the school run,” she said.
A spokesperson for the DWP said there were now 200,000 fewer children in absolute poverty after housing costs compared to 2019-2020, and that many of the most vulnerable were exempt from the benefit cap.
They added: “From next month the annual benefit cap for a single parent will be more than £25,000 in London and £22,000 elsewhere in Great Britain. It balances fairness for taxpayers with providing a vital safety net and is designed to provide a strong work incentive, by ensuring that work pays.
“Many of the most vulnerable claimants - including those who are in receipt of Universal Credit because of a disability or health condition that prevents them from working - are exempt from the cap,” they added.
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