DWP urged to remove benefit cap as Covid-19 doubles impact – income to lower by £62 a week | Personal Finance | Finance


Benefit cap rules limit the total amount of money a person can receive from state benefits. It applies to most people ages between 16 and state pension age and it affects a number of benefits including Universal Credit, child benefit and jobseeker’s allowance.

“Some did not have a strong work history and were capped immediately, and some were able to find enough earnings to move above the cap.

“However, many households are stuck in limbo, where they are not yet capped due to the grace period, but are unable to find work as jobs are so scarce.”

The organisation went on to lay out the following analysis:

  • 35,000 households will be capped in the New Year, as their grace period expired this month. 27,000 (77 percent) of these are households with children.
  • A further 41,000 households will be capped in the first few months of 2021, as their grace period expires from January to March.
  • Households with children are set to lose on average £62 per week.

CPAG called for the removal of the benefit cap in light of these findings, noting that in doing so 50,000 children would be pulled out of poverty, with a further 100,000 being pulled out of deep poverty.

They argued the logic behind the grace period is flawed, pointing to two big caveats.

In concluding their analysis, CPAG had the following to say: “Firstly, the earnings requirement is unnecessarily restrictive.

“There are lots of flows in and out of work, particularly at the bottom of the labour market. “People may only be able to find seasonal jobs, or parents may not work over school holidays as childcare costs cancel out their earnings.

“Secondly, when jobs are scarce, people are much less likely to be able to find employment during those nine months, regardless of their strong work history.”

CPAG shared a claimamants experience with the benefit cap to illustrate the difficulties, as a single parent with four children detailed: “Before covid I was a full-time working mum of four children…

“Due to covid I have lost my job, been forced to go to a food bank so I could feed my children, and had to rely on family members to help towards my bills.

“My 13-year-old son now has to cycle four miles to and from school as I cannot afford a bus pass or the fuel to take him daily. My 10-year-old has to walk to school, two miles each way.

“My two-year-old daughter no longer goes to her childminder as I cannot afford it. I have four children yet only get help with two of them even though I’ve worked full time for six years. Covid-19 is the reason I no longer have a job and it’s wrong to penalise hardworking parents.”

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