Benefit cap: Work and Pensions Committee urge DWP to ‘act urgently’ on rule changes

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UNIVERSAL Credit and other state benefits can be affected by what is known as the benefit cap. This cap came into focus in recent months with the Work and Pensions Committee calling on the DWP and wider government to raise the rates in place for legacy benefits in June. The committee has once again written to Thérèse Coffey to press on a number of points.

Universal Credit and other legacy benefits can be received by eligible claimants who are struggling financially but there are limits in place. The benefit cap is a limit on the total amount of state support that a person can get.

State benefits came into focus in June as the Work and Pensions Committee noted that while Universal Credit claimants received a lot of support in light of coronavirus, those on legacy benefits became less of a priority.

Because of this, they detailed that rates for older benefits must be raised to provide help for the millions of claimants who have yet to move onto Universal Credit.

The government raised the rates of standard Universal Credit and working tax credit payments but the committee expressed concern for claimants of other benefits, as Stephen Timms, the Chair of the Committee, explained at the time: “DWP’s frontline staff have worked hard to get support to millions of people.

“Without their actions, the impact of the pandemic could have been much worse.

“But the coronavirus pandemic has highlighted weaknesses in a social security system which at times is too inflexible and slow to adapt to support people in times of crisis.

“The focus has mostly been on the unprecedented numbers of new claims for Universal Credit.

“But in the background, people on legacy benefits—including disabled people, carers and people with young families—have slipped down the list of priorities.

“It’s now time for the Government to redress that balance and increase legacy benefits too. It’s simply not right for people to miss out on support just because they happen, through no fault of their own, to be claiming the ‘wrong’ kind of benefit.”

Today, the committee has once again called on the government to make additional changes to the system.

Stephen Timms wrote to Thérèse Coffey expressing concern for a number of unanswered questions: “We don’t necessarily expect the Government immediately to accept every recommendation we make. But we do expect that it will at least explain its position.

“This response to our report leaves many questions unanswered.

In the course of our inquiry, we heard concerns that the Government’s very welcome increases to some benefit rates would be undermined by the benefit cap”

Mr Timms went on to use the DWP’s own data to highlight specific issues: “Ministers assured us in April that only a small number of people would be affected. In fact, DWP’s own statistics show that 84,000 households were newly capped between February and May this year.

“The Secretary of State also assured the House in May that she was looking very carefully at what could be done for people who had mistakenly applied for Universal Credit and left themselves worse off as a result.

“We recommended that the Government act urgently to put this right. It now seems that nothing is going to be done for these people.

“If that’s the case, the Government should say so clearly, and explain why.”

Mr Timms concluded by calling systematic problems into question: “Just as importantly, there seems to be little acknowledgement of the role of the Department in planning for future pressure on the social security system.

“There needs to be a firm commitment to analysing how coronavirus has affected levels of poverty and a clear strategy—available for public scrutiny— for coordinating the employment response to the economic downturn.”

Currently, the benefit cap that claimants will face will depend on where they live in the UK.

The cap outside of Greater London will be as follows:

  • £384.62 per week (£20,000 a year) if in a couple
  • £384.62 per week (£20,000 a year) if the claimant is a single parent and their children live with them
  • £257.69 per week (£13,400 a year) if they’re a single adult

Within the capital, the cap will be:

  • £442.31 per week (£20,000 a year) if in a couple
  • £442.31 per week (£20,000 a year) if the claimant is a single parent and their children live with them
  • £296.35 per week (£13,400 a year) if they’re a single adult
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