New analysis also shows that around 170,000 children are now
living with a working adult as a result.
Work and Pensions Secretary today welcomed the new
analysis as evidence that the cap is helping to transform lives
by giving children “working role models in their families”.
The benefit cap is a limit on the total amount of benefit that
working age people can get – introduced in 2013 to restore
fairness to the welfare system. It incentivises work, including
part-time work, as anyone eligible who moves into work and then
earns enough for Working Tax Credit (or the equivalent under
Universal Credit) becomes exempt.
Since the introduction of the cap in April 2013, 180,000
households have had their benefits capped. With 48,000 households
having moved into work.
Work and Pensions Secretary said:
Every child deserves the best start in life, and we know that
children living in a household with someone in work do better
in school, have better educational attainment and are more
likely to have a job later in life than children growing up in
a home where no one works.
This new analysis into the number of children in workless
families reducing under the benefit cap, shows how our welfare
reforms are transforming lives by giving children real-life
working role models in their families.
In the past there could have been families living in cycles of
worklessness without the proper support or incentives to move
into work with the security and peace of mind that comes from a
regular wage. We now have record employment in the UK with more
than 1,000 people moving into jobs each and every day since
2010.
The unemployment rate (4.2%) has not been lower since 1975, and
the number of people out of work is down by 136,000 compared to a
year ago. On average, 1,000 people have moved into jobs every day
since 2010.
Work remains the best route out of poverty – around 75% of
children in poverty leave poverty altogether when their parents
move into full employment. Evaluation from the original cap shows
lone parents were 51% more likely to go into work after a year
than similar uncapped households.
In Universal Credit, claimants are exempt from the benefit cap if
they earn at least £542 a month, equivalent to 16 hours at the
National Living Wage. Working parents can also claim up to 85% of
their eligible childcare costs, regardless of hours worked and
how old the youngest child is.
The benefit cap is set at
£20,000 a year outside London and £23,000 in Greater London to
reflect higher rent costs.
Anyone working and receiving Working Tax Credit is exempt from
the cap, as are households where someone receives:
- Disability Living Allowance (DLA)
- Personal Independence Payment (PIP)
- the support component of Employment and Support Allowance
(ESA)
Those claiming Carer’s Allowance or Guardian’s Allowance are
exempt from the cap.
The figures cited above refer to households who had their Housing
Benefit capped.
The estimate of the number of
children in households that were capped but are now in
work is calculated by multiplying the number of children
in these households by the number of households.
Households with more than 5 children are grouped together, so for
this calculation we have assumed that there are 6 children in
these households.
