Leaked Memo Warns: Benefit Cap Could Drop 40,000 Children Into Poverty

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UK Government plans to lower the household benefit cap could see tens of thousands of children plunged into poverty.

The reduction in the upper limit of what families will now be able to claim annually from £26,000 to £23,000 was announced in the Queen’s speech last week.

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Internal government assessment seen by the Guardian shows lowering of welfare cap will be disastrous for families if parents are unable to find extra work

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The Guardian reports:

Ministers claim changes to the cap contained in the forthcoming employment and welfare benefits bill will deliver fairness for the taxpayer “while continuing to provide support for those in greatest need”.

But an internal government assessment, seen by the Guardian, shows that if parents are unable to find extra work the policy will put 40,000 more children on or below the official poverty line, on top of the 50,000 already affected under the current rate.

Marked “sensitive” and sent to the work and pensions secretary, Iain Duncan Smith, two weeks after the general election, the civil service memo forecasts that “around 40,000 more … children might in the absence of any behaviour change, find themselves in poverty as a result of reducing the cap to £23,000”.

“If these families respond to the cap by making behaviour change, for example moving into work, they are likely to see themselves and their children move out of relative poverty,” the civil service author adds.

Commenting on the leak, the Department for Work and Pensions said: “As the document itself makes clear, these figures do not take into account a key impact of the cap: that it incentivises people to move into work and improve their lives.”

The leak has emerged as housing associations forecast that, under the lower cap level, they will have to deal with a dramatic spike in rent arrears, evictions and homelessness, and will no longer be able to offer homes to jobless low-income families.

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