Explainer: How the UK Government’s new benefit cap will affect you


The UK Government’s new benefits cap is a big change to the benefits system that will hit 11,000 households in Scotland

THE UK Government has introduced its new benefits cap.

The cap is a major cut to welfare as part of the Conservative Governments £12bn cuts package announced in 2015 for the lifetime of the Westminster parliament.

CommonSpace looks at the scale of the cut and how it will affect ordinary Scots.

What are the origins of the benefit cap?

The new benefit cap is a more aggressive version of the cap introduced by the Liberal Democrat-Conservative UK coalition government in 2013 and which has been re-adjusted every year since.

The announcement to further lower the cap was made quickly after the 2015 UK general election, at a time when the new majority Conservative Government was forcing through large amounts of its programme against a disorganised opposition.

Iain Duncan Smith claimed he resigned over the announcement of a new drastic cap, though many Conservative colleagues, as well as critics of Smith’s tenure at the Department for Work and Pensions (DWP), believed his real motivation was to reposition himself as a supporter of Brexit ahead of the referendum on the UK’s membership of the EU.

How big a change is this to the UK benefits system?

The scale of the cut is massive, with the maximum in benefits claimants are able to receive coming down from a 2015 cap of £500 for couples and single parent households to £384.62.

For single adults the fall is even steeper, from £350 to £257.69.

Despite this, the measure is expected to cut UK spending by just £100m per year over the long run by the Institute for Fiscal Studies (IFS), a very small figure compared to the UK debt of around £1.6tn.

Who will be the hardest hit?

Estimates vary, but around 64,000 new household UK wide and 11,000 Scots families are likely to be immediately negatively impacted by the cap.

The impact of the cuts is regionally uneven, with poorer and deindustrialised parts of the country bearing the largest burden. 11,000 children in Wales will be made poorer, despite the country only having a population of 3 million.

According to various researchers and campaigners, single parents (typically women) and their children are set to take the worst impact from the cut.

Which benefits will be included in the cap?

Benefits which will be involved in the cap include:

housing benefit

income support

jobseeker's allowance

Employment and support allowance

Child benefit and child tax credits

Carer's allowance

Bereavement allowance

Universal credit (unless the claimants are deemed unfit for work)

Maternity and widow's benefits paid by the DWP

Which benefits will not be included in the cap?

The following benefits won’t contribute to the capped amount:

Disability living allowance

Armed forces benefits payments

Budgeting loans

Council tax support payments

Discretionary housing payments

Housing benefit for supported exempt accommodation

Winter fuel payments

People who will be exempt from the cap include:

Those who work more than 16 hours a week

People in work who have a universal credit account

Those eligible for working tax credits


Picture courtesy of Ron F.

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