Figures just released by the Department for Work and Pensions show that in February 2021, soon after the start of the third lockdown, 200,000 households were subject to the benefit cap. Behind this statistic are families having to get by on less than their assessed need because of the government’s decision to limit the amount of income any ‘non-working’ household can receive in social security. The pandemic has seen the number of capped households drastically increase, with the latest figures an increase of 153 per cent since February 2020, when 79,000 households were subject to the cap.
As part of a Nuffield Foundation funded research programme, we are exploring the impact of the benefit cap and the two-child limit on larger families (families with more than two children). We are walking alongside families like Bashita’s, hearing about the impact these policies have on everyday lives. What this research shows is the extent to which these policies create hardship, making difficult lives only more difficult, and pushing people already in poverty further and deeper into poverty. Bashita was capped after losing her job because of the pandemic. She told us how the benefit cap was affecting her and her family, and what it meant to be left with not enough money to get by:
Not enough, yeah, not enough left to pay a phone bill, you have to pay a lot of things; the kids have to eat, they have to go to school, they have to pay their bus to go to school. So I have to buy transport as well to… take them to school. So it’s not easy, yeah, it’s not easy.
Inevitably, perhaps, the benefit cap affects the mental health of parents who are having to try and get by on not enough. This is evident in new analysis we conducted for the research, but also in the accounts of parents like Bashita:
The benefit cap makes you like... if you don’t try like holding yourself, it can keep you depress[ed].
To escape the benefit cap, families must move to cheaper accommodation or enter paid employment (working more than the equivalent of 16 hours at the minimum wage). These steps are difficult to take at any time but have often been impossible during the pandemic. This has been Bashita’s experience – she has tried hard to find a new job and escape the cap but without success.
It is remarkable that the cap has continued throughout the pandemic and has not been a source of much political debate, especially as it would be relatively inexpensive to end (costing £500m a year). As we move out of the immediate COVID-19 crisis, there is rightly talk about how the social security system might be reformed and improved, with an understandable focus on keeping the £20 increase to universal credit. These conversations need to include the impact that the benefit cap has. Otherwise, we will continue to see thousands of families’ incomes capped, and the resultant hardship. Hardship that is the direct result of political choices.
The project has been funded by the Nuffield Foundation, but the views expressed are those of the authors and not necessarily the Foundation. Visit nuffieldfoundation.org