UK: Benefits cap trial begins in London – 150413 1325z

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Iain Duncan Smith. Secretary of State for Work and Pensions

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Benefit cap

DWP: “The benefit cap is part of the Welfare Reform Bill that received Royal Assent on 8 March 2012.

From April 2013 a cap will be introduced on the total amount of benefit that working age people can receive. This will mean that workless households should no longer receive more in benefits than the average earnings of working households.

In the first instance, the cap will be administered jointly by DWP and local authorities through deductions from Housing Benefit payments. In the longer term it will form part of the new Universal Credit system.

More detailed information about the cap can be found in the factsheet and the latest impact assessment below:

Implementation

The benefit cap will be implemented from April 2013, starting in four local authorities in London – Bromley, Croydon, Enfield and Haringey. These were chosen as London has the highest percentage of potential benefit cap claimants and a diverse cross section of residents. This will be a phased roll-out with the remaining local authorities implementing the cap from the 15 July 2013, with all appropriate households capped by the end September 2013.

A phased roll-out allows us to:

  • test our systems and processes end to end in a controlled live environment
  • ensure the supporting products and services for both staff and claimants are effective
  • ensure there is a measured approach to rolling out the cap to affected households
  • build capacity to learn and respond to issues raised in the initial phase of rollout to inform national rollout.

How you can help to support those affected

It’s important that claimants potentially affected by the cap are aware of the impact it could have on them.

Finding work and qualifying for Working Tax Credit may be the best way to ensure that the cap doesn’t apply and we will be offering employment support to all those potentially affected.

You can help them to understand what the cap might mean for them and encourage them to take up the offer of support and to respond proactively by finding work.

Households that aren’t affected by the cap

The cap won’t apply to households where a partner or any dependant child qualify for Working Tax Credit or receive any of the following:

  • Disability Living Allowance
  • Personal Independence Payment
  • Attendance Allowance
  • Industrial Injuries Benefits
  • Employment Support Allowance, if paid with the support component
  • Armed Forces Compensation Scheme payments
  • War Pension Scheme payments (including War Widow’s/Widower’s Pension and War disablement Pension).

Those affected may avoid or reduce deductions to their Housing Benefit if they:

  • negotiate the rent to a more affordable amount
  • move to cheaper accommodation, if possible
  • become entitled to an exempting benefit if the qualifying conditions are met.

There is also additional funding available through the discretionary Housing Payment scheme to support vulnerable households. This will be distributed to local authorities in the normal way.

How we are informing those affected

From the beginning of May 2012 we have been writing to all claimants potentially affected by the cap to give them as much notice as possible. An online calculator is available which can be used to get an estimate of how their Housing Benefit might be impacted at:

Claimants will need to be aware which benefits they receive and how much their award is for, in order to understand how the cap might affect them. They can get this information from their award letters or by contacting the departments that pay their benefits.” – DWP

News Reports

Benefits cap trial begins in London

guardian.co.uk Monday 15 April 2013 07.16 BST

“A cap on the amount of benefits people can receive begins on Monday in a policy that is being trialled in parts of the capital.

The cap, being introduced in four London boroughs – Croydon, Bromley, Haringey and Enfield – will see couples and single parents receive no more than 500 a week in benefits. The limit for single people is 350, although there are some exemptions.

National implementation of the cap will begin in July, and the policy is scheduled to come fully into force by the end of September.

The cap is being brought in to cut spending and to bring benefits payments into line with average income.

The work and pensions secretary, Iain Duncan Smith, said last week: “The benefit cap sets a clear limit for how much support the welfare state will provide – the average wage for working households.

“But it’s also a strong incentive for people to move into work and even before the cap comes in we are seeing thousands of people seeking help and moving off benefits.

“We have a very clear message: we will provide support to those who need it, but the days of outrageous claims giving people incomes far above those of working families are over.”

The government last week claimed the number of people expected to be hit by the cap had fallen from 56,000 to 40,000, with 8,000 claimants finding work through JobCentre Plus.

Duncan Smith hailed the figures, saying the cap had provided a strong incentive for people to look for jobs, even before it had started to affect their incomes.

But Jonathan Portes, director of the National Institute of Economic and Social Research and a former chief economist at the Department for Work and Pensions, said there was no evidence that the cap had affected people’s behaviour.

The cap was originally expected to save 275m a year from the welfare bill.

Couples and single parents to get no more than 500 a week in trial in four London boroughs before national rollout” – guardian.co.uk

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