Support 100 years of independent journalism.

  1. Business
  2. Economics
8 January 2013

The poorest and the disabled are hit hardest by the benefit cuts

The government's Impact Assessment shows that the poorest 10 per cent of households lose the most from the decision to raise benefits by just 1 per cent.

By George Eaton

Just a few hours before MPs started debating the coalition’s Welfare Uprating Bill, which will impose a cap of 1 per cent of benefit increases for the next three years, the government finally released its Impact Assessment (IA) of the legislation.

The document confirms that the poorest will be hit hardest by the decision not to raise benefits in line with inflation. As the table below shows, the poorest tenth of households lose the most in real terms (2 per cent of net income a week), while the second poorest tenth lose the most in cash terms (£5 a week).

The assessment also shows that, contrary to the government’s assurances, the disabled will be affected. In fact, households with a disabled member are more likely to lose out than non-disabled households (34 per cent compared to 27 per cent). This is because, in the words of the IA, “those who report themselves as being disabled are more likely to qualify for those benefits which are affected by the policy change”. Given this finding, perhaps it’s not surprising that the Department for Work and Pensions waited until the last possible moment to release its assessment.

We also learn that lone parents will lose more than any other family type (£5 a week), since “they have a lower employment rate than average and also often qualify for in-work support”, that women are more likely to be affected than men (33 per cent compared to 29 per cent) and that, in total, 30 per cent of all households will be affected.

Sign up for The New Statesman’s newsletters Tick the boxes of the newsletters you would like to receive. Quick and essential guide to domestic and global politics from the New Statesman's politics team. The New Statesman’s global affairs newsletter, every Monday and Friday. The best of the New Statesman, delivered to your inbox every weekday morning. A handy, three-minute glance at the week ahead in companies, markets, regulation and investment, landing in your inbox every Monday morning. Our weekly culture newsletter – from books and art to pop culture and memes – sent every Friday. A weekly round-up of some of the best articles featured in the most recent issue of the New Statesman, sent each Saturday. A weekly dig into the New Statesman’s archive of over 100 years of stellar and influential journalism, sent each Wednesday. Sign up to receive information regarding NS events, subscription offers & product updates.
I consent to New Statesman Media Group collecting my details provided via this form in accordance with the Privacy Policy