The Government has been dealt a huge blow as the High Court ruled its benefit cap is unlawful and illegally discriminates against single parents with young children.
Conservative ministers are now likely to be forced to change or scrap one of their flagship welfare policies, which limits the total amount of benefits a household can receive to £23,000 a year in London and £20,000 elsewhere.
The ruling was made in response to a judicial review brought by four lone parent families who said the cap would have a severe and disproportionate impact on them.
Ministers had attempted to have the case thrown out but were rejected by the court, which ruled earlier this year that the case must be heard as a matter of urgency. The Government said it was “disappointed” with the latest ruling and will appeal against the decision.
Delivering his verdict, High Court judge Mr Justice Collins said the benefit cap was causing “real damage” to lone parent families, and, in a further blow to ministers, said “real misery is being caused to no good purpose”.
“Those in need of welfare benefits fall within the poorest families with children”, he said. “It seems that some 3.7 million children live in poverty and, as must be obvious, the cap cannot but exacerbate this. The need for alternative benefits to make up shortfalls is hardly conducive to the desire to incentivise work and so not provide benefits. There is powerful evidence that very young children are particularly sensitive to environmental influences. Poverty can have a very damaging effect on children under the age of five.”
“The cap is capable of real damage to such as the claimants. They are not workshy but find it, because of the care difficulties, impossible to comply with the work requirement. Most lone parents with children under two are not the sort of households the cap was intended to cover... Real misery is being caused to no good purpose.”
The claimants, two of whom have previously been made homeless as a result of domestic violence, had said the fact they had children under the age of two meant they were unable to work the minimum 16 hours per week that is needed in order to avoid the cap on their benefits. As a result, their welfare payments were cut.
Lawyers for the four families said they had been unlawfully discriminated against on the grounds they are single parents and therefore unable to work as many hours as other people. The review was supported by charities including Shelter, Gingerbread and Women's Aid.
Following the verdict, the families’ solicitor, Rebekah Carrier, said: “The benefit cap has had a catastrophic impact upon vulnerable lone parent families and children across the country. Single mothers like my clients have been forced into homelessness and reliance on food banks as a result of the benefit cap. Thousands of children have been forced into poverty, which has severe long term effects on the health and well-being.
“We are pleased that today’s decision will relieve my clients – and other lone parent families around the country – from the unfair impacts of austerity measures which have prevented them from being able to provide basic necessities for their children.”
The Government immediately announced that it will appeal against the ruling and said it had been granted permission to do so.
A Department for Work and Pensions spokesman said: “We are disappointed with the decision and intend to appeal. Work is the best way to raise living standards, and many parents with young children are employed.
“The benefit cap incentivises work, even if it’s part-time, as anyone eligible for working tax credits or the equivalent under Universal Credit, is exempt. Even with the cap, lone parents can still receive benefits up to the equivalent salary of £25,000, or £29,000 in London and we have made Discretionary Housing Payments available to people who need extra help.”
In 2015, the High Court deemed the benefit cap unlawful on the grounds that it discriminated against disabled people by not exempting their carers from the cap. As a result, ministers were forced to amend the policy to include an exemption for anyone in receipt of Carer's Allowance.
The policy was introduced by the Coalition government in 2012 and was a pet project of Iain Duncan Smith, the former Work and Pensions Secretary. Ministers said it was not right that a family not in work should not be allowed to receive more in benefits than a working family. The cap was widely condemned for failing to take into account people’s specific circumstances and for targeting some of the poorest people in society, including almost 320,000 children.