Benefits to maintain frozen cap subsequent yr regardless of finish of two-child coverage | EUROtoday

A Department for Work and Pensions (DWP) minister has given an replace on Labour’s choice to freeze the cap on the overall quantity out-of-work advantages a household can declare, saying it’s “the best interest of children”.

The profit cap – separate to the two-child restrict – will probably be frozen for the fourth yr in a row in 2026, it was confirmed on the finish of November.

This limits the quantity of profit a non-working family with kids can obtain to £22,020 a yr (or £25,323 in Greater London) – the speed set in 2023/24. This doesn’t apply to common credit score claimants who’re caring for disabled individuals or are severely disabled themselves.

Speaking within the House of Lords, Baroness Maeve Sherlock, a minister of state for the DWP, advised friends there are “no plans” to raise the cap.

She added: “The benefit cap aims to incentivise work as, where possible, it is in the best interest of children to be in working households.

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“We are delivering a step change in employment and skills support for parents, enabling parents to balance work and caring responsibilities through high quality, flexible jobs, and improving access to childcare so parents are better able to work.”

There is a statutory obligation on the federal government to overview this stage each 5 years, with the subsequent overview being due in November 2027. However, this doesn’t stop ministers from making selections on it sooner.

The reiteration of the coverage comes regardless of Labour’s pledge to scrap the two-child profit restrict, typically often called cap, from April 2026. The enhance households obtain within the little one aspect of common credit score for his or her third or subsequent little one from this choice will probably be counted in the direction of the profit cap.

This means some households gained’t really feel the total influence of the change, as the quantity they obtain will probably be restricted by the cap. And for households which might be above the cap already, there will probably be no enhance in revenue in any respect.

There had been round 124,000 households hit by the profit cap in October, in accordance the the Child Poverty Action Group (CPAG), containing almost 300,000 kids. The charity had urged the federal government to scrap the cap alongside the two-child restrict, terming the insurance policies ‘evil twins’.

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CPAG researchers argue that eradicating the cap would raise these kids from the deepest poverty at a price of £300 million. Their evaluation confirmed that the cap leaves an Inner London lone dad or mum with three kids renting a non-public sector, three-bedroom dwelling, with simply £3 to reside on after lease.

The Resolution Foundation has calculated that one in six kids hit by the two-child profit cap won’t totally profit from its abolition, as their family is both already at – or will attain – the profit cap.

Alex Clegg, an economist on the influential suppose tank, mentioned: “The benefit cap arbitrarily breaks the link between need and entitlement in the benefit system. It doesn’t impact as many families as the two-child limit, but those who are hit by it can be pushed into acute hardship in a similar way.

“The fact that the value of the cap is frozen by default – and has been cut in cash terms since it was first introduced in 2013 – means its impact gets worse over time. The real value of the benefit cap for families is £14,500 lower in 2025-26 than when it was introduced in 2013-14.”

A DWP spokesperson mentioned: “We know that work is best route out of poverty, which is why we’re transforming employment and skills support for parents, with high-quality, flexible jobs and improved access to childcare.”