Close to 100,000 households, including more than 40,000 single parents with a child under the age of five will be materially worse off, following this week’s cut to housing benefits.
From Monday, the benefit cap, which was set at £26,000 a year and affecting mostly households in London or larger families, was lowered to £23,000 a year in London, and £20,000 outside the capital.
It is now feared that many private renters reliant on housing benefit will lose their homes as a result of the new benefits cap.
Since the capping policy was introduced in 2013, rents have continued to rise and look set to increase further, partly because buy-to-let landlords will be left with little alternative but to raise rents to recover some of their extra costs thanks to the government’s punitive new tax regime, including the removal of mortgage interest tax relief from April 2017.
Despite rising rents, it is estimated that the housing benefit cap reduction will see some households lose as much as £115 a week, leaving many existing renters struggling to meet their monthly mortgage payments, which will undoubtedly mean more landlords locking out tenants supported by state benefits.
The GMB union described the lower cap as “a monstrous new assault on 40,000 single mothers, which risks shattering the life chances of children up and down our country”.
However, the government insist that the level of the cap is fair because it is close to the average net salary.
The Department for Work and Pensions defended the new benefits cap by describing it as “a clear incentive to move into a job”.
Damian Green, the Work and Pensions Secretary, told BBC Radio 4’s Today programme that the government was making it “as easy as possible” for claimants to get work, by offering various incentives, including free childcare, to encourage people in to employment.
He said: “I’m not saying that lone parents have to go and find a full-time job. If they want to avoid the benefit cap they only have to be working 16 hours a week and we will be providing free childcare to enable them to do that.”
Under the new cap, people living in the UK outside of Greater London will receive a maximum of:
+ £384.62 per week (£20,000 a year) for a couple
+ £384.62 per week (£20,000 a year) for single people with children living with them
+ £257.69 per week (£13,400 a year) for a an individual who does not have children or whose children do not live with them
The limits are higher for those living in Greater London boroughs. The new cap is:
£442.31 per week (£23,000 a year) for a couple
£442.31 per week (£23,000 a year) for single people whose children live with them
£296.35 per week (£15,410 a year) for single people who do not have children or whose children do not live with them