A Department for Work and Pensions (DWP) benefit cap is set to cut peoples earnings by £65 per week.
The move has been described as "cruel and truly catastrophic" by campaigners, as reported by Lancaster Live. With benefits due to rise by approximately 10 per cent in April next year, people may see this as a positive.
However, the cap will mean that more than 100,000 may not see a single penny of the rise. Child poverty campaigners have called on Prime Minister Liz Truss to scrap the benefit cap.
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They have warned of a "growing gulf" between benefit rates, the cap, and the cost of living crisis. Households whose benefits will be capped will be left on £65 a week worse off, on average than if the benefit cap wasn't a thing.
According to analysis by Child Action Poverty Group (CPAG), around 120,000 households will not see any benefit rise when they are set to be increased in April 2023, in line with the current inflation rate.
They also said that 35,000 are due to be newly capped in April and will only see some of the increase before the cap kicks in. The benefit cap was introduced in 2013, and was intended to get people into work.
This cap limits the total amount of benefits that low-income and non-working households can receive, to £384.62 a week for families outside London.
This is the same level as 2016 – and therefore has not increased to reflect the rising cost of living. Due to this, the number of capped households has risen over time, and CPAG said people have experienced a “growing gulf” between their income and rising costs.
Removing the cap will allow £65 per week to be introduced into people's accounts, and CPAG said it would be "invaluable" in the current economic climate.
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£500 million would be required to remove the cap, which is just 0.2 per cent of the total spending on social security, CPAG added. Over the summer, then work and pensions secretary Therese Coffey hinted that the cap may be reviewed before next April.
CPAG chief executive Alison Garnham said: “The benefit cap is cruel and irrational at the best of times – many parents subject to it can’t escape it by working more because they are caring for very young children and housing costs are completely out of their control.
“But in the current crisis, its effects will be truly catastrophic for hundreds of thousands of children, pushing many into deep poverty.
“It is early days for the new Government and scrapping the cap would send a clear signal to families that the PM is on their side – there can be no doubt that leaving it in place will damage the lives of children up and down the country.”
The DWP said that the cap provides strong work incentives for families, and balances fairness for taxpayers with providing support. Any revision of the cap would come alongside decisions to uprate benefits, with any change taking place the following April.
The DWP referred to the £37 billion support package delivered by the Government, to help the public through the cost of living crisis. They also noted the new cap on average energy bills announced by Prime Minister Liz Truss upon taking office.
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