Some households have seen their monthly Universal Credit payments cut by more than £1,000 as part of a Government crackdown on the benefit, a new report has found.
The Department for Work and Pensions' (DWP) benefit cap places a limit on the total amount of benefits people can receive, and applies to a range of other benefits besides Universal Credit including Child Benefit, Child Tax Credit, Housing Benefit, Income Support and Jobseeker's Allowance for those below the State Pension age. The cap means that large amounts are being deducted in a bid to drive more people into employment, with over 100,000 households said to be affected, BirminghamLive reports.
A Government-commissioned evaluation found that the benefit cap has seen claimants spending less on their children and on essentials such as heating and food. The DWP has said that the cap is driving more people off benefits and into employment, but anti-poverty charities have repeated calls for the "arbitrary, cruel" measure to be scrapped.
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For the average claimant, around £50 a week is being docked from their benefits. But almost 1,000 households have seen their monthly Universal Credit payment cut by more than £1,000, the evaluation found.
The research, which was scrutinised by the Institute for Fiscal Studies (IFS), suggested common impacts of the cap included reduced spending, falling into debt, and borrowing from friends or family. The vast majority of those affected experienced a reduction in income but did not look for a job, the IFS said.
Under the benefit cap, couples (with or without children) or single claimants with a child of qualifying age living outside London can claim a maximum of £22,020 a year in benefits - equivalent to £1,835 a month or £423.46 a week. Single adults without children can get up to £14,753 a year in benefits - equivalent to £1,229.42 a month or £283.71 a week.
Carl Emmerson, deputy director at the IFS, said around 112,000 households were affected by the cap. He said: "The benefit cap increases incentives to move into paid work, to move home or to move onto a disability benefit that exempts a household from the cap.
"The DWP study shows that each of those responses have occurred. In particular, around five in 100 capped households had an adult move into paid work as a direct result of the benefit cap, with this impact being bigger among those who are capped by a bigger amount, and those with pre-school children.
"But about 90 per cent of capped households do not respond in any of these ways – and presumably were having to find other ways to manage with a lower income. Indeed an accompanying study also published by DWP today suggests that common impacts include reduced spending, falling into arrears on bills, and borrowing from friends or family.
"In November 2022, on average, affected households lost £50 of benefit income per week due to the cap and a small number saw very large reductions; almost 1,000 households saw their monthly Universal Credit award reduced by more than £1,000."
Anela Anwar, chief executive of anti-poverty charity Z2K, said: "These reports demonstrate that DWP is well aware of the devastating impact of the benefit cap, but has chosen to continue to deny more than 100,000 households the benefits they’re due. The cap is still far below its original level set a decade ago, forcing people to go without essentials and damaging their health.
"There is no place for the benefit cap in the social security system: it’s arbitrary, cruel and denies people the chance of dignity and stability. DWP should scrap the cap."
A DWP spokesperson said: "We are committed to protecting the most vulnerable which is why benefits, including Universal Credit, and the benefit cap, have gone up by 10.1 per cent and we have provided more than £94 billion over 2022-23 and 2023-24 to help people with higher bills – an average of over £3,300 per household.
"As these reports show the benefit cap provides a strong work incentive, balancing fairness for hard-working taxpayers and encouraging people to move into work where possible." You can read more about the benefits cap and how it affects you on the gov.uk website.
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