Social Security Benefits: Coronavirus

Department for Work and Pensions written question – answered on 20th November 2020.

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Photo of Seema Malhotra Seema Malhotra Shadow Minister (Work and Pensions) (Employment)

To ask the Secretary of State for Work and Pensions, how many welfare claimants have a 9-month benefit cap grace period due to end in December 2020.

Photo of Seema Malhotra Seema Malhotra Shadow Minister (Work and Pensions) (Employment)

To ask the Secretary of State for Work and Pensions, how may new universal credit claimants have been affected by the benefit cap since 23 March 2020.

Photo of Seema Malhotra Seema Malhotra Shadow Minister (Work and Pensions) (Employment)

To ask the Secretary of State for Work and Pensions, how many and what proportion of claimants who started a universal credit claim in March 2020 have been exempt from the benefit cap due to the 9-month grace period.

Photo of Seema Malhotra Seema Malhotra Shadow Minister (Work and Pensions) (Employment)

To ask the Secretary of State for Work and Pensions, what plans she has to amend the length of the benefit cap grace period.

Photo of Mims Davies Mims Davies The Parliamentary Under-Secretary of State for Work and Pensions

The benefit cap restores fairness between those receiving out-of-work benefits and taxpayers. Universal Credit claimants may benefit from a nine-month grace period where their benefit will not be capped if they have a sustained work record with monthly earnings of at least £604 for the past year. Households can still receive benefits up to the equivalent gross earnings of around £24,000, or around £28,000 in London.

i. As at August 2020, there were 160,300 Universal Credit households with a grace period due to end in December 2020. The grace period is applied irrespective of whether or not the household has sufficient benefit income to be in scope for the cap. This ensures that a claimant will benefit from the grace period exemption should any change of circumstances bring them into the scope of the cap during that period. This does not necessarily mean that all of these claimants will actually be capped in December when their grace period ends.

ii. As at May 2020, 19,100 new Universal Credit claimants whose claims started since 23 March 2020 inclusive had been affected by the benefit cap.

iii. Information relating to Universal Credit claimants who started a claim in March 2020 and have been exempt from the benefit cap due to the nine-month grace period is not readily available; to provide it would incur disproportionate costs. The Department is not required to calculate the level of benefit payment that takes a claimant above the benefit cap threshold while a claimant is in the nine-month grace period because the claimant is exempt from the benefit cap during this time.

There are currently no plans to change the benefit cap grace period. The benefit cap provides fairness for hard-working taxpaying households, whilst providing a reasonable safety net of support for the most vulnerable. Whilst this means that some claimants will have a limit on the total amount of benefits they can receive, there are a range of exemptions for when the cap should not be applied including exemptions for the most vulnerable claimants who are entitled to disability benefits and carer benefits

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