Families set to lose £100 a week under 'chilling' new benefit cap

Around 64,000 households will be affected by the new benefit cap

(Getty Images )

The Government has been accused of “chilling callousness” over a tough new benefit cap that could lead some families to lose more than £100 a week.

From Monday. the annual limit on welfare payments to unemployed households will drop from £26,000 to £23,000 in London and £20,000 outside the capital.

The move was announced by George Osborne last year and has been described as a "monstrous" assault on struggling families that will shatter the life chances of the poorest children.

Around 20,000 families are currently capped by an annual limit of £26,000 (or £500 a week) on total household benefits, introduced in 2013. But the new lower caps are set to bring an explosion in the numbers affected to around 64,000 households.

Nearly two thirds of those affected are single mothers, according to the general union GMB.

For single people without children the cap will fall at £15,410 in Greater London and £13,400 across the rest of the UK.

According to the Department for Work and Pensions, the 23,500 households who previously had their benefits capped have moved into work since 2013.

But analysis by the Institute for Fiscal Studies suggests that "the majority of those affected will not respond" to the tougher cap by moving into work or moving house.

"For that majority it is an open question how they will adjust to the loss of income," it said in a report.

The Liberal Democrats argue the new cap will “rob the poorest families of £6,000 a year” and claim Prime Minister Theresa May has abandoned her promise to help the poor, following her vow in her Conservative conference speech last month to “make society fairer for families”.

Leader Tim Farron said: "Theresa May said one thing on the steps of Downing Street and is now robbing some of the poorest families of £6,000 a year. She just misled the British public and is now clobbering those who can least afford it. It makes her party look like hypocrites.

"Attempts by the Conservatives to somehow re-brand themselves as the workers' party are now looking absurd. This is disgraceful."

GMB National Secretary Rehana Azam said: "Just four months ago, Theresa May stood on the steps of Downing Street promising to fight injustice and to ensure every person regardless of their background would be given the chance to be all they want to be. Today she is unleashing a monstrous new assault on 40,000 single mothers, which risks shattering the life chances of children up and down our country.

"This has echoes of the staggering hypocrisy and chilling callousness that saw the victimisation of single mothers in the bad old days of the early 1990s. Theresa May once said she would change the 'nasty party' but the mask has slipped again."

The move comes amid warnings that the poorest half of households face flat or falling incomes over the course of the Parliament.

Lower wage growth and higher inflation could reduce typical earnings by around £1,000 a year by 2020, the Resolution Foundation warned and has called on Philip Hammond to use the Autumn Statement to reverse the "damaging cuts" to work welfare allowances.

"With the uncertainty of Brexit, there could be fewer well paid, secure jobs to go round - not to mention problems of access to nurseries with closures and cuts to public services,” Ms Azam said.

“All the while food prices are going up - and the evidence shows that single parents were already skipping meals to provide for their children, even before this latest attack."

Work and Pensions Secretary Damian Green said: "Each statistic represents a person who has moved into employment and can now enjoy the security and dignity that works brings.

"By making sure that those people who are out of work are faced with the same choices as those who are in work, the benefit cap has been a real success.

"By lowering the cap today, we are ensuring the values of this Government continue to chime with those of ordinary working people and delivering on our commitment to make sure work pays more than welfare."

Additional reporting by Press Association