The Government’s controversial cap on benefits is failing to encourage more people into work and forcing pregnant women to consider terminating their pregnancy, according to evidence published by the Work and Pensions Committee.
The cross-party group of MPs has published evidence received from charities, local authorities, and others, detailing how the lower cap is impacting on affected households.
The benefit cap limits the total amount of benefit and tax credit income that an out-of-work household can receive, subject to certain exemptions, and was reduced from £26,000 a year to £20,000 a year outside London and £23,000 within London.
This new, lower cap was rolled out nationally over a twelve week period starting on 7 November last year. Implementation was completed by mid-January.
Curtailed by Theresa May’s unexpected announcement of a general election in June, the full inquiry has now been suspended, with evidence submitted to the inquiry highlighting difficulties faced by families and individuals affected by the changes.
Preliminary indications suggest affected households are struggling to cope with the new cap, with charities reporting a significant rise in the number of people reaching out for advice and support.
The Government estimates that, in the absence of any ‘behavioural changes’ from claimants, 88,000 households will be affected by the new cap, compared with around 20,000 under the previous policy.
But the Committee says the lower cap is “not only deepening the impact on households but also spreading it more widely across the country”, adding that “the proportion of capped households who are outside London is set to increase from three-fifths to four-fifths”.
Local authorities reported that the lower cap is ‘beginning to bite’ in areas where there had previously been relatively few affected households.
Welfare advice service Turn2Us highlighted “worrying trends” reported by their helpline, with women being forced into considering terminating their pregnancy to escape the cap.
The charity said: “The most worrying trend that is emerging is pregnant women asking the call handler to undertake a benefit check to ascertain what they would be entitled to if they continue with the pregnancy, citing that the outcome will help them to decide whether they continue with the pregnancy or terminate it.”
SNP MP Alison Thewliss said: “This is truly harrowing evidence that goes to the heart of how the two child cap will affect real families.
“The rape clause has quite rightly caused widespread revulsion and concern among the general public – now we see yet another example of the awful consequences of the UK Government’s attack on child tax credits.
“We all know that contraception isn’t 100% effective, but no woman should have to worry about whether they can afford to continue their pregnancy because of government austerity – the UK government should urgently explain what assessment they undertook to ensure this wouldn’t happen.
“The Tories can’t just fob off the mounting concerns over the human impact of their two child cap – it’s time that this harmful policy was scrapped.”
Other advisory services reported a substantial rise in demand from households affected by the cap – “with claimants suffering drastic and abrupt reductions in income and severely constrained in their ability to avoid the impact”.
Citizens Advice Scotland reported a large rise in requests for benefit-cap related advice since the third quarter of 2016, typically from lone parents and large families.
The housing charity Shelter spoke about the mother-of-three in Sunderland, who had successfully made arrangements with her private landlord to settle the rent arrears caused by the original cap, but who now faces the threat of eviction due to her benefits being slashed by £180-a-month.
Halton Housing Trust told the Committee that tenants initially responded to the cap by applying for Discretionary Housing Payments, or claim a disability benefit that provided exemption from the cap.
They added: “Where there are concerns about the lower benefit cap, it does not initially act as an incentive to find work.”
Chair of the Committee Frank Field said: “Once again we see a benefit change purported to push people into work, while the evidence points to the contrary effect.
“Changes that actually did save money and help the strivers get into proper, gainful employment would be very welcome, but that is not what we are seeing with new policies like Universal Credit or the lower benefit cap.”
Labour MP Karen Buck, a Committee member, said: “As the benefit cap starts to bite across Britain it looks from the evidence we’ve seen so far like a drastic cut to income for people who are really unable to cut their living costs any further.
“The evidence does not show us that being plunged further into poverty encourages or helps people to find work, and the vast majority of those hit by this cut are already recognised as unable to work at the moment.
“It is very hard to see any benefit from the benefit cap.”