Monday, 02 March 2015

Freud rejects change to calculation of cap

Welfare reform minister Lord Freud has indicated the government is not willing to change the way the proposed £500 a week cap on benefits for workless households is calculated- but has promised measures to ‘ease the transition’ for families.

The Welfare Reform Bill, currently going through the House of Lords, will replace a host of income-related benefits with a universal credit and cap total benefits at around £26,000 a year for lone parents and couples.

The cap will be based on median household earnings, but a cross party group of peers believe the cap as it stands, unfairly punishes households with families as the average income for households with families is higher.

John Packer, the Bishop of Ripon and Leeds, tabled an amendment last night (Monday) calling for a cap to be set in line with the income of working families with children. Lord Bishop Packer said this would lift 25,000 children from the cap. He said: ‘The amendment promotes fairness because it compares like with like. If we are to set a cap for families with children, that should be compared with working families with children.’

Liberal Democrat peer Lord German  said the cap would ‘punish children for the decisions of their parents.’ He said: ‘Children have little or not control over the upbringing they receive. I wonder whether the current cap , as defined here, could encourage family breakdown as families split in order to get their benefit entitlement.’

Lord Freud re-iterated the government’s belief that the cap should be set at around £500 a week.

He said: ‘Even with the limits of the cap, households will still be able to receive significant amounts of financial assistance from state welfare payments – an amount equal to the median national wage without going to work.’

Lord Freud said the bill will be flexible enough to allow governments to adapt the way the cap is calculated in the future. He also said the government will look at how the government will ease the transition of families to the new system, but would not explain further about what is being considered.

Lord Bishop Packer withdrew his amendment, and said: ‘I retain considerable disappointment in terms of moving forward in this area. There is clearly considerable disquiet among your lordships over how this is developing.’

Crossbench peer Lord Richard Best tabled amendments calling for a 26-week grace period before the cap is imposed, for housing benefit to be removed, and for homeless households in temporary accommodation to be excluded. Lord Bishop Packer moved a further amendment calling for child benefit to be excluded from the calculation of the cap.

The debate will continue tomorrow night (Wednesday).

Readers' comments (2)

  • The tories have been targeting poorer communities since
    the general election,and have passed 2 finance bills,
    a welfare reform bill and the localism act , to severely
    diminish social tenants financial standing.They are
    aiming to cut £18 billion from poor people ,including
    a benefits cap but also by cutting benefit entitlements
    at lower levels beneath this capped figure.
    The tories seem to want to move about
    2 million households who they consider to be
    overhoused / overpriced ,but they are not providing
    any dedicated housing strategy to assist these people
    to move home.

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  • I totally agree with the cap for FUTURE claims, however we specialise in large social families, and so we can already see them splitting their claims into 2 households ( which actually costs the State MORE money), or moving into houses too small for them and their broods. this is not healthy or wise. More debate is needed to discuss existing claims, take K and k for example, all the kids are his, they have 7 and are under 10 years old. She has demanded 3 times after the births of the last 3 to be sterilised but at age 23/24/26 she was refused as too young and every contraception failed. They get just over £800 a week, total. what to do? send some into care? split up? 'cos thats whats going to happen isnt it? Future claims must be capped, the country cant continue to fund these families, but what to do with the ones already here? Oh, and by the way, they are white, working class and not catholic, just a large family. I am their landlord, someone advise ME on how to go forward? and I have several more like this, 5, 7 8 9 children, one with 12 but some of them have left home now.

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