On Monday 19th December, the Benefit Cap for unemployed families in Stoke-on-Trent fell to £20,000 per annum, or £384.62 per week. Whereas the original £26,000 Benefit Cap supposedly limited unemployed families to an income of no more than the average wage, the new cap seems to be entirely arbitrary. In effect, compared to the original Benefit Cap, the £20,000 one removes the equivalent of two more children's tax credits, if their parent(s) is/are unemployed.
In practice, this will mean two-parent, three-child families will get no more than £52 Housing Benefit per week, which is less than half the Local Housing Allowance for a three-bedroom home in this area. A lone parent raising four children gets no more than £25 Housing Benefit; larger families, only a token 50p. Neither social nor private tenancies are sustainable on that, not even in cheap-as-chips Stoke-on-Trent.
To which the answer from many is 'get a job' or 'don't have so many children' - as if poor families can somehow hand back the ones they can't afford. The Benefit Cap is, we're told, a popular measure. While Labour have slated the Bedroom Tax and pledged its abolition, there is no such promise when it comes to the Benefit Cap. Perhaps they believe that the range of exemptions protect those who genuinely can't work their way out of it?
If so, they are wrong.
The Benefit Cap clearly applies to two groups of people that benefit rules accept are in no position to find work and are not required to do so. The first is those who, after a tough medical assessment, have been put in the ESA 'work-related activity group', theoretically expected to be fit for work in the foreseeable future - but not yet. Included in this group are many profoundly sick and disabled people; I often cite as an example that you might have lost the use of your dominant arm and hand, or have actually lost them, and still not score enough 'points' to qualify for ESA even at this rate. Many have poor mental health. Few would be an employer's first choice; most could not take a job even if offered it.
The other group unable to work but still intentionally capped are women in the later stages of pregnancy, those who have recently given birth and the carers of very young children. There are no exemptions from the cap for women fleeing domestic violence, nor for recently bereaved parents. A family protected from the Benefit Cap while one parent is terminally ill and receiving PIP and/or Support Group ESA could be hit as soon as s/he dies, if their spouse hasn't been claiming Carer's Allowance, as might a family on the death of a disabled child. Even a claim for Carer's Allowance would earn no more than an eight week respite, the time for which it is payable after a death. It would take a heart of stone for a Local Authority not to allow a discretionary housing payment (DHP) in those circumstances but that needs an application, backed up with a detailed breakdown of the family's budget, at a time when extra distress is the last thing they should have to cope with.
Exemptions for families where either a parent or child is receiving a disability benefit ease the pressure on some of the most vulnerable but, with PIP and DLA regularly reassessed and often not fairly, the prospect of a horrific 'domino effect' of lost benefits is never far away. Take a lone parent getting DLA at the middle rate for care on the basis of supervision needs, perhaps for epilepsy, with grand mal fits too infrequent to meet the ESA criteria for 15 points and a place in the support group (weekly) but occurring often and without warning. While DLA might have accepted her need for continual supervision, there is no guarantee that s/he will score 8 PIP points for 'daily living'. S/he loses £55.10 per week, the DLA middle rate for care. In addition, losing DLA means no disability premium or severe disability premium - together worth £104 per week.
Ironically, losing all this could also means losing Housing Benefit, if the family was caught by the Benefit Cap. With so much other income gone, a family in these circumstances would perhaps be more likely to fall into rent arrears than one used to budgeting on less.
A similar nightmare results if a disabled child loses DLA, perhaps when transitioning to PIP at 16. Loss of a qualifying disability benefit - £21 to £82 per week - means loss too of the disabled child elements of Child Tax Credit, worth between £68 and £113 per week. A parent carer loses £34.20 'carer premium' from their means-tested benefit and may also have to take on the role of 'jobseeker' to get benefits. Then the Benefit Cap slices into their Housing Benefit.
You have the right to appeal the DLA/PIP decision but getting a decision on this, which may still not be favourable (although 63% of PIP appeals succeed) will take months. You can ask for a DHP, though you may have to keep asking, as most Councils time-limit awards - and you may be unlucky: 'discretionary' is the key word here.
Exempting carers is helpful though not without risk to people who were never supposed to be touched by the Benefit Cap - older people. Most people probably don't realise that a disabled person's benefits can be affected if they have a carer who claims Carer's Allowance. It's all down to that benefit geek's favourite, the severe disability premium, currently around £61 per week and included in the calculation of means-tested benefits where someone getting Attendance Allowance, PIP for daily living or DLA high or medium rate care i) is treated as living alone and ii) does not have a carer in receipt of Carer's Allowance.
For some pensioners, specifically those with capital of £16000 or above, the SDP is often their ticket to Guarantee Pension Credit, 'passporting' them to maximum Housing and Council Tax benefit when otherwise they would have no entitlement. Many people who get this have no idea how it works, nor that their carer claiming Carer's Allowance could bring the whole thing down like a house of cards. The loss isn't just the £61 SDP - it's all entitlement to HB and CTR, likely to exceed £100 per week. The carer might gain more, or possibly less - it's a £34 carer premium plus the reinstatement of HB lost to the Benefit Cap. In all likelihood, they too will have no idea how the disabled person's benefit will be affected, and that could set up a huge overpayment for the pensioner later.
In other cases, the pensioner might know the likely loss but agree to take it to save a trusted carer losing their home. Or the pensioner might be bullied by an unscrupulous carer into making up the Benefit Cap shortfall from his/her benefits. It's a troubling situation and one in which advisers will have to tread carefully, with potential conflicts of interest between, and within, families.
