The Benefit Cap, a weekly limit to the amount of benefits a person can claim, has been a long standing issue for Z2K’s clients and continues to negatively affect people both on legacy benefits and on Universal Credit. For some people, the double whammy of moving to Universal Credit and being hit by the Benefit Cap, leaves them destitute and poverty stricken. Alex* is a prime example of this as he was left with just £20 per week to live on.
Alex approached Z2K back in 2015 wanting support into housing which, through our Private Rented Sector (PRS) project, we were able to provide. However, 4 years later and, as is the case with so many, Alex lost his job and was searching for work.
In most circumstances, a claimant is exempt from the Benefit Cap when working. However, because Alex had lost his job, he was subject to it. Normally this amount would come out of the entirety of the Universal Credit payment, counting both his allowance and housing costs as one lump sum. This would allow Alex to maintain a standard amount to live off whilst temporarily leading to a reduction in the amount of rent that he could pay. However, due to the Managed Payment to his landlord (an arrangement whereby his rent amount was automatically paid to his landlord), the cap was applied to Alex’s standard allowance, affecting the amount he could live off. With just over £80 a month to survive on, Alex was living below the poverty line and had been relying on charity funding and foodbank vouchers to temporarily sustain himself.
At this point, the welfare system relies on cohesion between local and central government, and claimants in this situation have the option to apply to their council for a Discretionary Housing Payment (DHP). These payments are paid for households where rent is not being covered entirely by Housing Benefit or Universal Credit on a temporary basis to alleviate and safeguard the residence of claimants. However, with the Managed Payment in effect, the council refused Alex this payment on the basis that his full rent was still being met by Universal Credit. Alex’s troubling circumstances were, again, ignored and the Managed Payment to the Landlord was for a second time not properly considered.
To side step this, claimants are expected to cancel the arranged Managed Payment, apply for a DHP and once financial circumstances improve, re-request for the Managed Payment again. Not only incredibly stressful, this process delays correct payments to claimants and prolongs destitution. And that’s assuming that the person is able to do this without assistance.
DWP figures show that in the quarter between February and May 2019 26,000 Universal Credit claimants were Benefit Capped. This is an increase of 11,000, a staggering 70 per cent more than in February 2019. Figures also show that at least 20 percent of Universal Credit awards including a housing cost element had managed payments to landlords.
Given the flagship nature of both the Benefit Cap and Universal Credit and the amount of households affected, we should be able to trust that the intersection of these have been thought out and designed in a way that works properly and reduces bureaucracy. As it stands, the system adds too many barriers to welfare and does not support struggling households sufficiently.
An issue that has long been a thorn in the side of policy makers, it is sad and frustrating to see the system continue to fail and punish too many. Both locally and in central government, a stronger sense of compassion and a better understanding of the benefit system is essential in order to see the improvements necessary to prevent cases like Alex’s continuing to occur. Scrapping the Benefit Cap entirely would no doubt lift people out of poverty and give back the opportunity to people to live with the dignity and respect they deserve.
Z2K are currently supporting Alex along with local solicitors to launch a Judicial Review against the council’s decision.
*A pseudonym has been used to protect our client’s identity
See more information on Z2K’s work on the benefit cap/
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