The Government might review the benefit cap between now and April next year in light of the cost-of-living crisis, Work and Pensions Secretary Therese Coffey has told MPs.
Asked by the Work and Pensions Committee if the level of the cap might change in light of “rapidly rising costs”, the minister said: “We do have this statutory duty – I think I’ve had some advice because now we no longer have the Fixed-term Parliaments Act on exact timing – I’m slightly concerned as to whether we have a real reflection of life, but I’m getting some advice on that.”
Asked again if the Government might review the cap, Ms Coffey replied: “Yes, we may. I just want to make sure it’s as normal a landscape as possible.”
More than 120,000 households are already affected by the benefit cap, which was introduced in April 2013 and limits how much individuals, couples and families can claim.
It was initially set at £26,000 per year, and £18,200 per year for single adults with no children, but reduced to £20,000/£13,400 nationally, and £23,000/£15,410 in Greater London, which is where it remains.
A further 35,000 people are expected to fall into the bracket this year, leading campaigners to call on the Department for Work and Pensions (DWP) to abolish it.
Ms Coffey confirmed that the cap has not been reviewed since 2016.
Asked if she proposed to publish a review if it were carried out, she said: “I’ll get advice on what has to be published and what doesn’t have to be published.”
MPs also questioned the minister on why the Government had decided to make one-off cost-of-living payments – with the first due on July 14 – instead of relying on the benefits system.
Ms Coffey said: “We recognise this is intended to be a one-off payment for this year. It is not intended to be a permanent benefit. The Government’s recognised the challenges that people are facing.
“We didn’t want to necessarily change ratings beyond what we’d already done with my annual rating review. Some of that would mean locking in, but we come back, frankly, to some of the challenges of our IT systems.
“UC (Universal Credit) is far more agile, our legacy benefits aren’t, and it’s absolutely critical that people on both legacy benefits and UC were to get this payment.
“We’re confident that we’ll get those payments out the door.”
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