Bid to raise cap to £31,000 a year as groups campaign against direct payment
Lib Dem peers call for increased benefit caps
Rebellious Liberal Democrat peers are demanding that benefit caps are increased by more than £5,000 a year.
As it stands, the Welfare Reform Bill, currently going through the House of Lords, will introduce a total benefit cap of £26,000 a year per household, which would come into force in April 2013.
But Liberal Democrat peer Lord Michael German, co-chair of the work and pensions committee, is leading calls for the way the cap is calculated to be altered.
He wants the cap to be based on the average income for households with children, rather than the average income for all households.
The Department for Work and Pensions family resource survey, published in May, shows the median income for households with children is more than £600 a week, equivalent to £31,200 a year.
Lord German said the campaign to change the cap is ‘building up a head of steam’. He added: ‘Treating all households as having no children is not sensible.’
Baroness Celia Thomas, another Liberal Democrat peer, said: ‘We are hopeful we can get some sort of compromise.’
Several Labour peers and cross-benchers are also understood to be sympathetic to the idea and could vote against the bill. Peers fear the cap is too low and could lead to families having nowhere to live.
Karen Buck, Labour’s shadow work and pensions minister, said: ‘I can’t see how they can’t compromise. If the cap stays as it is as it will lead to a homelessness disaster.’
Meanwhile, a group of 17 organisations, including the National Housing Federation, National Federation of Arm’s-Length Management Organisations, tenants’ bodies and homelessness charities, wrote to work and pensions secretary Iain Duncan Smith on Tuesday to urge him to support a proposed amendment to the bill to give tenants the right to have the housing benefit element of the universal credit paid to their landlord.
A spokesperson for DWP said there are no plans to change the £26,000 cap.
Inside Housing has been calling for more equitable reform as part of its What’s the Benefit? campaign.