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Housing Benefit

Work and Pensions written question – answered on 8th June 2011.

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Photo of Stephen Timms Stephen Timms Shadow Minister (Work and Pensions)

To ask the Secretary of State for Work and Pensions if he will estimate the cost to the Exchequer of exempting from the total household benefit cap households where any member is in receipt of (a) disability living allowance, (b) personal independence payment, (c) attendance allowance, (d) constant attendance allowance, (e) employment and support allowance and is in the support group, (f) employment and support allowance and is in the work-related activity group, (g) carer's allowance and (h) any element or other component of universal credit paid in respect of a disability in each of the next five financial years.

Photo of Chris Grayling Chris Grayling The Minister of State, Department for Work and Pensions

The spending review 2010 announced that from 2013 we will introduce a cap on the total amount of benefit that working-age people can receive so that households on out-of-work benefits will no longer receive more in welfare payments than the average weekly wage for working households. The benefit cap is intended to promote fairness between those in and out of work and to increase incentives for people to move into work or increase their hours of employment.

On its introduction we estimate that household benefit payments will be capped at around £500 per week for couple and lone parent households and around £350 per week for single adult households.

We are looking at ways of easing the transition for families and providing assistance in hard cases.

If the benefit cap were applied in full, as described in the supporting documentation for the spending review 2010 the savings to the Exchequer are estimated to be £225 million in 2013-14 and £270 million in 2014-15.

The household benefit cap as announced excludes households where someone is in receipt of (a) disability living allowance, (d) constant attendance allowance. Claimants receiving (b) personal independence payment will be treated the same way as claimants receiving disability living allowance for the purposes of the benefit cap.

Estimates suggest that excluding households where a member is in receipt of (c)attendance allowance or (e) employment and support allowance and is in the support group would have a negligible impact on the overall savings from the benefit cap.

Excluding households where a member is in receipt of (f) employment support allowance in the work-related activity group is expected to reduce savings to approximately £210 million in 2013-14 and £225 million 2014-15. Figures are not available for 2015-16 and beyond.

Excluding households where a member is in receipt of (g) carers allowance is expected to reduce savings to approximately £210 million in 2013-14 and £255 million 2014-15. Figures are not available for 2015-16 and beyond.

Note that estimates above are based on the current benefit system including changes announced in the spending review 2010, but excluding universal credit.

Information on section (h) is not available as the estimated savings from the benefit cap in universal credit will depend upon final detailed design issues regarding the treatment of in-work households.

Analysis of those affected by the benefit cap has been modelled using survey data—as such there is a degree of uncertainty around the results.

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