Today, GMLC releases our new research report, ‘Scrap the cap: the benefit cap in 2024 and why it needs to go‘.
Following the release of the new benefit cap statistics on 17 September 2024, GMLC’s report looks into the role of the benefit cap in worsening child poverty in the UK.
The statistics show that between February 2023 and May 2024, the number of households who had their benefits capped rose by 61% from 77,000 to 123,000, primarily as a result of rising rents (which are included in the cap) and the government’s decision to increase benefits by 6.6%. Those who are capped have not seen the benefit of this increase, and have become worse off in real terms.
In the report, we draw on existing research to evaluate the two main arguments that justify the cap – that capped households should move into work, or that they should find more affordable housing. We then summarise the two Supreme Court cases that have found the cap to be lawful. We also interview a GMLC client who was subject to the cap in 2024.
At the end of the report, we make recommendations as to how, short of scrapping the cap entirely, the government could mitigate the cap’s discriminatory and cruel effects on households who struggle to escape the cap.
These recommendations are:
- Raise the level of the benefit cap to cover the increase in Local Housing Allowance and benefits in April 2024, and commit to raising it in line with other benefits in future years.
- Create extra exemptions to the cap which take into account the circumstances when claimants struggle to escape the cap through work:
- Do not apply the cap in months where a claimant is awaiting a determination of their capability for work;
- Lift the cap after claimants have applied for disability benefits such as PIP or child DLA, until such a time as their entitlement is decided and any appeal period is over;
- Do not apply the cap to Claimants who are single parents with a child under 3 years old.
- Ensure that benefits claimants who work enough hours but who are paid 4-weekly are not disadvantaged by the cap by calculating income on a monthly basis.
- Change policy so that 16 hours of training or work, even if it does not meet the earnings threshold, exempts claimants from the cap, so that apprentices and those doing training courses are not capped.
- Apply any deductions to Claimants’ entitlement, not to the capped total.
- Adopt a policy of rejecting requests for deductions for debts, such as rent arrears and energy bills, for capped claimants unless the claimant proactively consents to them or asks for them.
- Control private rents to prevent landlords taking advantage of increased government rates of Local Housing Allowance by imposing rent increases.
- Exclude housing costs from the calculation of the cap, so that the income households receive for their living costs is not slashed as a result of landlords raising rents.
