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Five questions answered on the benefits cap roll out

How much is the government actually going to save?

New Statesman
A cap on the amount of benefits people aged between 16 and 64 can claim is being rolled out. Photograph: Getty Images

A cap on the amount of benefits people aged between 16 and 64 can claim is being rolled out in England, Scotland and Wales today. We answer five questions on the changes the benefit cap will bring.

What’s the biggest change the cap brings to benefits?

Chiefly that couple and lone parents will no not be able to receive more than £500 a week or £350 a week for a single person.

The cap does not affect Disability Living Allowance or Personal Independence Payment, as well other benefits including industrial injuries benefit or a war widow or widower's pension.

How will the cap be enforced exactly? 

The cap will affect payments including jobseekers allowance and child and housing benefit, which all count towards the cap.

Those affected by the changes will have their housing benefit reduced.

It has already been implemented in four London boroughs - Haringey, Enfield, Croydon and Bromley - since April, which were all given £1.8m by the government in the first year, to help with the transition.

However, Haringey estimates that it will have to add £2m of its own money to pay for the changes this year alone.

What have critics of the cap said?

They say it fails to tackle underlying issues, such as problems faced by those trying to find work. The National Housing Federation (NHF), which agrees that those on benefits should not earn more than those in work, says the cap does not work in London and the South East, where the cost of rent is high.

What has Pensions Secretary Iain Duncan Smith said about this change?

"The benefit cap returns fairness to the benefits systems," Mr Duncan Smith told the BBC.

"It ensures the taxpayer can have trust in the welfare system and it stops sky-high claims that make it impossible for people to move into work.

"The limit of £500 a week ensures no-one claims more in benefits than the average household and there is a clear reason for people to get a job - as those eligible for Working Tax Credit are exempt."

How much does the government expect to save from the benefits cap?

It hopes the cap will save the tax payer about £110m in the first year, and £300m over the next two years.

About £95bn a year is currently paid in benefits to families of working age.