How does the new benefit cap affect single mothers?

Published: 10th Nov 2016

In brief

Claim

The new benefit cap will affect 40,000 single mothers.

Conclusion

The Department for Work and Pensions has estimated that up to 54,000 families with single mothers could be affected by the benefit cap in 2016/17. Of those, it’s likely that around 40,000 were newly affected as a result of the recent lowering of the cap.

“[The benefit cap is] a monstrous new assault on 40,000 single mothers, which risks shattering the life chances of children up and down our country.”

GMB, quoted by BBC News, 7 November 2016

The GMB’s estimates are likely to be right and are broadly in line with the government’s own figures from earlier this year.

The Department for Work and Pensions estimates that up to 54,000 single mothers might be affected in 2016/17 by the benefit cap after the reduction came into force today. Its impact assessment published in August said that up to 88,000 households could be affected altogether by the benefit cap this year and that 61% were expected to be single mothers.

The GMB is just talking about single mothers who have been newly affected by the change to the benefit cap though. We don’t have exact figures for this, but before the cap was increased about the same proportion of people affected were single mothers. That suggests something in the region of 40,000 single mothers newly affected, as the GMB says.

The Department says this is because women overall are much more likely to be affected by the benefit cap, and the majority of households affected by the cap are expected to contain children.

Estimates by the independent Chartered Institute for Housing suggest that the number of households affected could be much higher.

From 7 November the cap will be lowered to £23,000 for families in London, or £20,000 outside London. For single people without children it will be £15,410 per year in the capital and £13,400 in the rest of the country.

The figures assume that family circumstances won’t change now the cap has been introduced

These figures assume that no households will change their behaviour as a result of the cap, for example changing their levels of rent or their work status.

Analysis by the Institute for Fiscal Studies (IFS) found that only around 5% of households affected by the old levels of the cap moved into work as a result. It suggested that the new, lower cap will result in some people moving into work as a result of the “strengthened financial incentive” and a few others moving to cheaper accommodation. It also suggests that some will claim disability benefit in order to become exempt from the cap.

But the IFS also suggests based on experience of the cap so far that the majority affected by the cap will do none of these things and will have to cope with a loss of income.

On average, households affected by the cap will see their benefits reduced by around £60 per week, according to the DWP impact assessment.

Why so many single mothers?

Single parents are much more likely to not be in employment than married or cohabiting parents.

Between April and June 2016, 67% of single parents with dependent children were in employment compared to 74% of cohabiting or married women and 93% of married or cohabiting men.

Of these single parent families the vast majority are likely to be single mothers. In 2016, 86% of the 2.9 million single parent families in the UK were headed by women. The Office for National Statistics suggests that this is because women are more likely to take on “main caring responsibilities for any children when a relationship breaks down”.

What’s happening to the benefit cap?

The benefit cap  was fully rolled out from September 2013. It limited the amount of benefits a family could receive to £26,000 a year, or £18,200 for a single person with no children.

The latest figures show that in August 2016 around 20,000 households across Great Britain had their benefits capped. Altogether around 79,000 households have seen their benefits capped at some point between April 2013 and August 2016. But 59,000 of these households’ circumstances had changed so that the cap no longer applied to them.

 

Correction 10 November 2016

We corrected this piece and clarified the conclusion after the DWP confirmed that 61% of single mothers referred to the total number affected by the benefit cap, rather than those newly affected by the change. This doesn’t change our conclusion that 40,000 is likely to be right. We've also updated the conclusion.


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