The petition of the residents of the constituency of Glasgow East,
Declares that the UK benefit cap is a punitive measure which forces families unnecessarily into poverty; notes the figures from the Poverty Alliance which suggest up to 150,000 households outside of London will have their benefit capped and could lose up to £1,800 per annum in social security support.
The petitioners therefore request that the House of Commons urge the Government to grant time the Second Reading of the Benefit Cap (Report on Abolition) Bill and commit its support to passing all stages in the House.
And the petitioners remain, etc.—[Presented by David Linden, Official Report, 18 January 2023; Vol. 726, c. 498.]
[P002794]
Observations from the Minister for Employment (Guy Opperman):
The Government firmly believe that there has to be a limit on working-age benefits that the state should provide to households. It is not reasonable or fair for taxpayers to pay for people to live on out-of-work benefits at higher incomes than they themselves receive from work. The benefit cap provides a clear incentive to move into work, which evidence consistently shows is the best and surest way out of poverty.
Universal credit households are exempt from the cap if the household earnings are at least £658 (£722 from April 2023) each month, while those who still receive housing benefit are exempt if they are entitled to working tax credits. Getting claimants back into work remains our primary focus, and securing employment will significantly decrease the likelihood of a household being affected by the cap. In the latest quarter to July 22, on average 270 households every week moved off the benefit cap through increasing their earnings or starting work. Even in the current economic climate, the UK employment rate in the period from October to December 2022 stands at an estimated 75.6%, while unemployment remains relatively low at 3.7%.
We continue to protect vulnerable claimants for whom work may not currently be a viable option. In recognition of the additional costs relating to a disability, households are exempt from the cap if somebody is receiving, for example, disability living allowance, personal independence payment, child disability payment or adult disability payment. Universal credit claimants who receive the “limited capability for work related-activity” element or “employment and support allowance” claimants in receipt of the support component are also exempt from the cap.
The Government recognise and appreciate the vital contribution made by carers, which is why there are exemptions for those entitled to carer’s allowance, the carer’s element in universal credit and guardian’s allowance.
Eligible childcare costs that are repaid through the universal credit payment are exempt from the cap. This also supports people get into work and progress in employment.
We also want to support those with a strong recent work history who find themselves without work, or when their earnings reduce. As a result, the benefit cap is not applied for nine months for those receiving universal credit where the claimant, their partner or ex-partner has earned at least the benefit cap earnings threshold of £658 (£722 from April 2023) in each of the previous 12 consecutive months.
We should remember that the proportion of capped households remains low in comparison to the overall working-age benefit caseload at just 2% across Great Britain. In Scotland, that proportion is even lower at 0.8%.
Since the Poverty Alliance report was published (which reflects the position at March 2022 and, as such, includes out-of-date analysis), the Secretary of State has reviewed the benefit cap levels and decided that they should be increased in line with CPI in the year to September 2022 (10.1%) from this April. This means that all currently capped households (around 120,000 in August 2022) will see an increase when their benefits are uprated in April. In addition, around 30,000 of the 120,000 households will be taken out of the cap entirely, and around 60,000 other households, who would have become capped in the absence of an increase in the levels, will not become capped.
The annual benefit cap levels will therefore increase to £25,323 for couples and lone parents in London and £22,020 for the rest of Great Britain, and to £16,967 for single people without children in London and £14,753 for the rest of Great Britain. This means that, on average, households will gain around £29 extra in benefit a week. Households will be able to receive benefits up to the value of gross earnings of around £26,500 or £31,300 in London.
Claimants can approach their local authority to be considered for a discretionary housing payment. These can be paid to those entitled to housing benefit or the housing element of universal credit who face a shortfall in meeting their rental costs.
The Government understand the continued pressures that people are facing with the cost of living. The Government are therefore providing over £11 billion in 2023-24 through cost of living payments to offer tax-free cash support that does not count towards the benefit cap. They will include up to £900 in cost of living payments to households in receipt of eligible means-tested benefits, which will be split into three payments of around £300 each across the 2023-24 financial year; a separate £300 winter payment to over 8 million pensioner households paid in addition to the annual winter fuel payment; and a £150 payment to people in receipt of an eligible disability benefit. Further to this, the energy price guarantee will be extended from this April until the end of March 2024. Over this period, the EPG will bring a typical household bill to around £3,000 per year in Great Britain.
Additionally, as a result of the household support fund, the devolved Administrations have been allocated £158 million in Barnett consequentials as usual. It will be for the devolved Administrations to decide how to allocate their additional Barnett funding.