Benefit cap to cut payouts for 100,000 from Monday

BENEFITS will be capped at a lower rate from next week for more than 100,000 families across Britain, in a move ministers hope will encourage them back to work.

At least 116,000 households with one to four children will get less in benefits when the cap comes in next Monday, according to research from the Chartered Institute of Housing.

Families could be down by as much as £115 a week.

The lower cap limits the total amount of benefits a household can claim from £26,000 to £23,000 in London, where living costs are higher. Outside the capital, the maximum benefit package will reduce from £26,000 to £20,000. Those on disability-related benefits are exempt from the cap.

Ministers want to peg benefits to just under the average salary, to encourage people to seek work or increase their hours rather than relying on the state.

But the CIH research found 300,000 children live in households that will be affected by the cap. Terrie Alafat, the chief executive of CIH, said the new cap would mean many families would be at risk of losing their homes.

She said: ‘The results of our research are extremely worrying.

‘It shows that the reduction in total benefits is going to hit some of the most vulnerable families of all sizes across England, Scotland and Wales. These families will lose out when the cap comes into effect from November 7 and in many cases will straight away face a substantial gap between their rent and the help they receive to pay for their housing.’

But a work and pensions department spokesman said: ‘We are committed to helping people who are able to work into jobs and the benefit cap provides a clear incentive to move into employment for those who can.

‘Anyone eligible for working tax credits, carers’ allowance, and most disability benefits are exempt from the cap.’