Government claims benefit cap is already pushing people into work

Published by 24publishing for 24dash.com in Housing and also in Central Government, Local Government

Some 1,700 claimants who may have been affected by next April's household benefit cap have moved into work with a further 5,000 requesting back-to-work support, the Government has claimed.

From next April, benefit payments for out-of-work households will be capped at £500 a week for couples and lone parents and £350 a week for single adults.

The measure - which is expected to affect some 67,000 UK households (44% in the social rented sector) - is to ensure out-of-work benefits no longer exceed the average weekly wage.

Ahead of the introduction of the cap next April, the Government has released "ad-hoc statistics" allegedly showing early feedback from claimants at risk of having their benefit capped next year.

It follows letters sent out to affected claimants in April by the Department for Work and Pensions (DWP) with Jobcentre Plus also contacting claimants to offer further advice and support.

The DWP statistical release notes: "Between May 4 and July 6, of the 58,000 claimants that have been contacted indicative information informs us approximately 1,700 claimants who might have been affected by the cap have moved into work and a further 5,000 have indicated they would like to receive support to get back to work."

The department stressed the figures have been taken from a DWP management information system and have "not been subject to the validation and quality assurance checks that would be associated with National Statistics".

Work and pensions secretary Iain Duncan Smith said: “These early indications show that the scaremongering about the benefit cap has been unwarranted.

“We’re giving people plenty of notice that their benefit will be capped and they need to take action. People will get the support they need to get into work, instead of being left to live their life on benefits.”

What is not clear from the release, however, is how many claimants would have moved into work anyway - information probed by Channel 4 News.

Robert Joyce, senior researcher at the Institute for Fiscal Studies, told Channel 4 News: that the figures do not reveal the effect of the Government's benefit cap.

He said: “Indeed, this number is consistent with the policy having had no effect at all. Over any period, some fraction of an unemployed group will probably move into work, regardless of whether a benefits cap is about to be implemented.

“The number of people who moved into work as a result of the policy is 1,700 minus the number of people who would have moved into work anyway.

“We do not know the latter number, so we do not know the effect of the policy.”

Government estimates project that all households affected by the cap will be in receipt of housing benefit. The estimated mean weekly amount of housing benefit received by the 67,000 affected by the cap is £240. This is the amount before the cap is applied; after the cap has been applied, this figure is reduced by £83 per week.

Council tax benefit will not be included in the household benefit calculations. Those on working tax credit will be exempt from the cap.

The cap is expected to deliver £290 million savings in 2013/14 and £330 million in 2014/15.