By Daniel Hunter
The benefit cap starts being introduced across the country today (Monday), restoring fairness to the welfare state.
The cap will roll out from now to the end of September with the amount of benefits working-age households can claim limited to the average working wage — £500 a week.
"Returning fairness to the welfare state in this country is long overdue. We will always be there to support those who need help, but the days of blank cheque benefits are over and the benefit cap is a key part of this," Work and Pensions Secretary Iain Duncan Smith said.
"We need a system that no longer traps people in a cycle of dependency and is fair for the hardworking taxpayers who fund it.
"Seventy years after Beveridge helped establish Britain’s welfare state, we are restoring public trust in it. We are ensuring it is there as a safety net for those who need it but that no-one can claim more than the average household earns in work."
By the end of May 2013, just over 2,400 households had been capped in the boroughs of Enfield, Haringey, Bromley and Croydon, where the benefit cap was initially introduced in April.
The phased roll-out has helped to show the best ways to support claimants into work as well as working in partnership with local authorities.
In total, it is expected that 40,000 households will have their benefits capped. This will save £110m this year and £185m next year.
Over the last year, Jobcentre Plus has contacted claimants affected by the benefit cap to discuss their options and offer support. Over 12,000 have moved into work and 32,300 having accepted employment support by June.
Ipsos MORI research of 500 people who were notified within the last year that they would be capped, but who subsequently moved into work, found:
- 45% said they had sometimes, rarely or never been in paid employment since leaving school or further education;
- around half of people who knew about the cap took action in response to it, with 62% of them looking for a job;
- 61% of those currently in work found their current job after they were told about the cap;
- this figure increases to 72% of those who report having been infrequently in the workplace during their working lives.
The cap will apply to combined income from the main out-of-work benefits — Jobseeker’s Allowance, Income Support, and Employment Support Allowance — and other benefits such as Housing Benefit, Child Benefit and Child Tax Credit.
The benefit cap will not affect a household if a member is entitled to Working Tax Credit.
All households which include somebody who is receiving Disability Living Allowance will be exempt as will those who receive a War Widow’s or Widower’s Pension.
The benefit cap will not be applied for 39 weeks to those who have been continuously in work for the previous 12 months.
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