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The “deeply dangerous” profit cap should be scrapped, a kids’s charity has urged a decade after the measure was introduced in.
A few of the worst-affected households have lower than £50 to dwell on every week after paying their hire, the Youngster Poverty Motion Group (CPAG) mentioned in its evaluation.
The cap was launched on April 15 2013, below the then-Conservative and Liberal Democrat coalition authorities which hailed it as a manner of “restoring equity to the welfare state”.
There is no such thing as a rhyme or cause to the profit cap and it’s deeply dangerous to kids. All political leaders should decide to scrapping it earlier than it pulls extra kids into its internet
Alison Garnham, CPAG
It sees the quantity of advantages a family receives lowered to make sure claimants don’t obtain greater than the cap restrict.
Sir Iain Duncan Smith, who was work and pensions secretary on the time, mentioned the cap was a key half to ending the times of “clean cheque advantages”.
However in its report, the CPAG manufacturers Saturday an “sad anniversary”, saying “kids and households are being pushed into deep poverty”.
The charity acknowledged: “The Authorities claims that the profit cap is required as a piece incentive.
“Nevertheless, the Authorities’s personal analysis of the coverage discovered that the overwhelming majority of capped households don’t transfer into work.”
A Authorities-commissioned analysis, printed in April, discovered that whereas the introduction of the cap noticed some folks transfer into paid work, transfer residence or onto a profit that exempted them, the overwhelming majority, about 90%, of these affected didn’t and subsequently simply skilled a discount in earnings.
The introduction of the cap noticed claimants spending much less on their kids and necessities reminiscent of heating and meals, the report from the Institute for Fiscal Research (IFS) mentioned.
The CPAG mentioned its evaluation urged that in some areas of London, regardless of the cap being increased, a lone mum or dad with three kids has to cowl all non-housing prices on £44 per week.
The group mentioned that whereas “nowhere fares as badly as London, it’s clear that capped households all throughout the nation could be left with little or no after paying their housing prices”, with its analysis exhibiting a lone mum or dad with three kids was left with £106 after housing prices in Guildford, £147 in Brighton and Hove, and £170 in Oxford.
The CPAG described the Authorities’s rationale for the profit cap as “flawed” and known as on the Authorities to take away it, insisting this might “considerably cut back the depth of poverty for the 250,000 kids at present dwelling in households affected by the cap with out harming work incentives”.
It added: “Eradicating the cap would solely price £300 million, 0.1% of the overall quantity spent on social safety.”
Alison Garnham, CPAG chief government, mentioned: “The Authorities is at its most illogical with its profit cap, the Division of Work and Pensions assesses households’ wants, determines their entitlement, then slaps a flat-rate cap on that entitlement, denying households what the division itself says they want.
“So wants don’t get met, entitlements aren’t paid and 250,000 kids are trapped by the cap in deep poverty.
“No household ought to need to dwell on £44 every week.
“There is no such thing as a rhyme or cause to the profit cap and it’s deeply dangerous to kids.
“All political leaders should decide to scrapping it earlier than it pulls extra kids into its internet.”
The most recent Authorities figures, printed in June, confirmed that some 97,000 households throughout a lot of the UK that had their advantages capped included kids.
The full variety of capped households elevated by 3% within the newest quarter, in line with the Division for Work and Pensions (DWP) statistics.
This implies there have been 2,900 extra households topic to the profit cap throughout England, Scotland and Wales as of February 2023 in contrast with November 2022.
Round 114,000 households had their advantages capped as of February 2023 and 86% of those included kids.
Some 70% of households that had their advantages capped are single-parent households, the DWP mentioned.
A Authorities spokesperson mentioned: “We’re dedicated to defending essentially the most weak which is why we’ve elevated the advantages cap in step with inflation and are offering report monetary help price round £3,300 per family.
“Our actions have helped almost two million folks, together with 400,000 kids, out of absolute poverty after housing prices since 2010, whereas the profit cap supplies each a powerful work incentive and an important security internet for many who want it.”