In a decision delivered this morning (18 March 2015) the Supreme Court dismissed a challenge that the benefit cap was in breach of the European Convention on Human Rights.
The benefit cap limits the amount of benefits a household can receive to £500 a week for couples and £350 a week for households of a single adult. A cap of £26,000 a year for out-of-work families is the equivalent of a salary of £34,000.
Work and Pensions Secretary Iain Duncan Smith said:
I am delighted that the country’s highest court has agreed with this government and overwhelming public opinion that the benefit cap is right and fair. I am proud to say that it is one of the most significant reforms we’ve implemented over the past five years.
A key part of the long-term economic plan, the benefit cap is encouraging people to change their behaviour and motivating them to find work.
The department has successfully defended this case in the High Court, Court of Appeal and now for the final time in the Supreme Court.
With 200 people moving into work or stop claiming Housing Benefit every week, the cap has led to thousands of people gaining the financial security and esteem which comes with a job and pay packet.
And importantly this restores fairness into the benefit system.
Before the cap, benefit claims could rise to the equivalent salary of £74,000 or beyond.
The benefit cap was introduced in April 2013, and it is estimated to save almost £225 million over 2 years.
Over 55,000 households had their benefits capped by November 2014. Over 16,000 households who had their benefits capped have now moved into work or stopped claiming Housing Benefit entirely.
The benefit cap is one of the government’s most popular policies. More than 7 in 10 people agree that it is only fair for households to receive no more in out-of-work benefits than the average working household receives in pay after tax.
Recent research showed that the cap is motivating people to find work:
- those who would be affected by the cap are 41% more likely to go into work than a similar group who fall just below the cap’s level – this trend didn’t exist before the cap was in place – indeed those with higher weekly benefit used to be less likely to move into work
- 38% of those capped said they were doing more to find work, a third were submitting more applications and 1 in 5 went to more interviews
- 40% of those who said they had looked for work because of the cap in February actually entered employment by August
More about the benefit cap
Read the Supreme Court judgment.
Read the latest benefit cap research.
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