The £500 a week benchmark used by the coalition government to set its household benefit cap is significantly lower than the level of average earnings, a freedom of information request has revealed. Net median earnings for 2011-12 (the most recent year available) were £564 a week for working-age households.
The disclosure is significant because the main political justification for the £500 figure is that it is designed to ensure no household can receive more in benefits than it would receive (on average) through earnings from work. On this basis, it appears that those households subject to the cap are being hit by a benefit cut of around £64 a week, or over £3,300 a year, for which there is no rationale.
Polling conducted for the coalition government has suggested strong public support for the household benefit cap, under which no household is allowed to receive benefits totalling more than £26,000 each year.
The polling was conducted by Ipsos MORI in early June 2013, using an online survey. In addition, a telephone poll was conducted among people notified that they would be affected by the benefit cap and who subsequently found work.
Almost 2,500 households had their housing benefit cut during the first six weeks of the new cap on overall benefit payments, according to results from the initial phase running in four London boroughs. Under the cap introduced by the coalition government, the total amount of benefit working-age households can receive is restricted to £26,000 a year. National roll-out of the cap (in England, Scotland and Wales) began on 15 July 2013.
Iain Duncan Smith, the Secretary of State for Work and Pensions, is to be called in front of the Work and Pensions Select Committee in June over the misuse by the department of government statistics. This follows the rebuke from the official statistics watchdog for claiming that the benefits cap is pushing people to find paid work.
The select committee’s decision to ‘examine the way the DWP releases benefit statistics to the media’ follows a petition to the committee, signed by 96,666 people, calling for the committee to ‘hold IDS to account for his use of statistics on welfare’. Jayne Linney, who set up the petition on Change.org commented: ‘By starting this petition we’ve shown that everyone has the tools to call politicians out if they try to make things up. They can’t get away with spinning statistics any longer.
Work and Pensions Secretary Iain Duncan Smith has been rebuked by the official statistics watchdog for claiming the benefits cap is pushing people to find paid work. It said his claim was not supported by the official statistics, and was a breach of the code of practice on their use.
Duncan Smith had claimed in April that 8,000 people who would have been affected by the benefits cap had already moved into jobs ahead of its introduction, and that this 'clearly demonstrates that the cap is having the desired impact'. This prompted an official complaint to the UK Statistics Authority by the TUC. In response the watchdog ruled that notes accompanying the statistics on which Duncan Smith relied make it clear that methodological and other factors – and not 'behavioural change' – lay behind a drop in estimates of those potentially affected by the cap.
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.
A primary school in London’s most affluent borough is set to lose half its pupils as a result of the government’s benefits cap, according to a report in the Observer.
The school, St Cuthbert with St Matthias Church of England school in Kensington and Chelsea, the country’s richest borough, is making plans for the loss of up to 100 pupils in the wake of the government’s benefits cap.
The school’s headteacher, Stephen Boatright, said that children from six families had already moved to live as far away as Nottingham and Hull. He said schools in Enfield, north London, where the costs of private accommodation were lower, were already taking in huge numbers of children.
The £500-a-week benefits cap, which is due to be implemented in 2013, is expected to leave around 130,000 families across the capital unable to pay their rent.