Benefit cap roll-out begins in London

Roll-out of the controversial cap on household benefit payments began in four London boroughs on 15 April 2013.

The cap means no household will be able to claim benefits totalling more than £500 each week, which the government says equates to average household earnings of £26,000 a year (net of tax and national insurance payments). Single people without children will be limited to £350 a week. The cap is expected to be fully operational nationally by September 2013.

A coalition press release said: 'the days of outrageous claims giving people incomes far above those of hard working families are over'. But commentators expressed fears the cap will have the sharpest effect on families with children and on people in areas (especially London) with high housing costs.

At the same time a new official analysis from the DWP showed the number of households likely to be affected by the cap had fallen from the original estimate of 56,000 to just 40,000, equivalent to around 0.2 per cent of all households. The Secretary of State, Iain Duncan Smith, reportedly claimed this was the result of families finding work or cheaper properties in anticipation of the cap – even though the DWP analysis makes no mention of behavioural effects, instead pointing to various methodological and policy changes. A former chief economist at the DWP said there is 'no evidence at all' that the cap has affected people's behaviour. The TUC said it had lodged an official complaint with the UK Statistics Authority over Duncan Smith's 'misuse' of official statistics.

SourceAd hoc Statistics on Households Identified as Potentially Impacted by the Benefit Cap, Department for Work and Pensions
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