Over 150,000 households had their benefits reduced due to the benefit cap in May, almost double the amount compared to before the pandemic.
Charities are calling on the government to scrap the benefit cap for the duration of the coronavirus pandemic as they say the latest statistics show that households are unable to take full advantage of the temporary welfare measures introduced in response to the crisis.
Latest statistics from the Department for Work and Pensions (DWP) show that as of May this year, 150,000 households had their benefits capped. This is a 93% increase on the 79,499 households who had their benefit capped in February before the coronavirus pandemic hit.
Of the households capped, 43% saw their benefits docked by £50 or more per week, while 17% lost £100 or more per week. Single-parent families made up 62% of those who were hit with the cap.
The benefit cap was introduced to limit the total amount of benefits a single household can receive, with the amount varying depending on the make-up and location of the household.
During the pandemic, the government has seen a huge increase in the number of people applying for benefits. In March, the DWP processed almost 500,000 applications in nine days.
In response to the crisis, the government has increased the Local Housing Allowance rate – which determines how much housing benefit private renters receive – to cover the cheapest third of rents within a local area.
However, these changes were not accompanied with a raising of the benefit cap, meaning more households are likely to have their benefits docked.
Under Universal Credit, the benefit cap is not applied for a ‘grace period’ of nine months if the household was already earning at least £604 per month for the previous 12 months.
Polly Neate, chief executive of Shelter, said: “It’s crystal clear the benefit cap is undermining the government’s efforts to sure up our welfare safety net.
“Many embattled parents who were already struggling with low pay and have lost their job or had their hours cut because of COVID-19 are finding themselves capped – losing vital support at the worst possible time.
“The desperate calls we are getting from parents left with little to survive on – forced to choose between paying the rent or feeding their children – are a source of deep despair. I don’t believe this government wants to see families left hungry, hopeless and facing homelessness while this deadly virus continues, but this is what is happening.
“We are in extraordinarily difficult times. This flaw in the welfare system has to be fixed before a flood of families find themselves destitute. We are urging the government to think again and scrap the cap for at least the duration of the pandemic in light of the poverty it inflicts.”
Jon Sparkes, chief executive of Crisis, said: “With each passing day comes new job losses as the impact of the pandemic is felt. These figures show thousands of people are turning to the benefits system to break their fall, only to discover that the benefit cap is cutting them off from vital support.
“Despite ongoing assurances that the benefit cap grace period would protect people newly claiming, we know that people on low incomes aren’t getting this support, which is leaving many worrying about how they are going to pay their rent or put food on the table for their children.
“If we are to avoid a wave of people from losing their homes through no fault of their own, it’s vital that the government immediately suspends the benefit cap so that people have the means to stay afloat. Otherwise we risk all the good work to protect people being undone.”
A DWP spokesperson said: “The benefit cap, up to the equivalent salary of £28,000 in London, ensures fairness for hard-working taxpaying households and a strong work incentive, while providing a much-needed safety net of support.
“We remain committed to helping the most vulnerable in society, which is why we currently spend more than £95bn a year on the benefits system, supporting more than seven million people.”