Osborne mulls further £6,000 cut to benefit cap

Chancellor George Osborne is considering lowering the benefits cap by a further £6,000, one of his aides confirmed today.

The Treasury will base a decision on whether to make the further cut depending on the effectiveness of the current benefit cap, which began its national roll-out on Monday, in reducing the welfare bill.

From Monday households in areas where the cap has been implemented cannot receive combined benefits – including housing benefit – of more than £26,000 a year. The measure has already been trialled in four London boroughs since 15 April and will be rolled out across the country over the next 12 weeks.

An aide told Inside Housing: ‘We want to see how the policy beds in. But clearly over time, lowering the cap is an option.’ He confirmed backbench Tory MPs had called on Mr Osborne to consider making the further cut.

A Department for Work and Pensions impact assessment, published last year, said the £26,000 cap would lead to 67,000 households having their benefits cut by an average of £83 per week in 2013/14. A total of 90,000 adults and 220,000 children will be affected, the assessment said.

Duncan Shrubsole, director of policy at homelessness charity Crisis, said: ‘There has been a lot of political and media discussion on the benefit cap which too often forgets the harsh realities faced by those families and individuals it affects – big drops in income, tough choices between rent, food or debt, facing being uprooted from family and support networks.

‘Life on benefits is tough, not a lifestyle choice – ministers should be taking the time to understand what it is really like to live with this cap, not blithely condemning claimants and talking of more cuts.’