Exclusive: Benefit Cap Sees Lone Working Parents' Income Plummet £624 This Year

Rachel Wearmouth

Single working parents will see their incomes plummet by a “shameful” £624 this year due to the benefit freeze, according to new research shared with HuffPost UK.

Analysis of how the 2015 welfare squeeze has hit lone parents – almost all of which (85%) are single mums – lays bare the staggering drop in real terms income for this group. 

A lone parent with two children working 35 hours-a-week, earning the national living wage and claiming child and/or working tax credits, will see their overall net income fall to £624 less in real terms in 2019-20, compared to 2015-16, the analysis showed.

Former Chancellor George Osborne capped the overall amount of benefit a household could receive in 2014 to £20,000 a year, or £23,000 in Greater London, as an “incentive” to get people into work. 

Most benefits are included under the cap, including universal credit, jobseekers’ allowance, income support, child benefit, housing benefit and child tax credit.

The analysis shows that, while the National Living Wage will climb to £8.21 in April, the four-year freeze on social security payments will remain in place until March 2020, dealing the huge £624 blow to their average overall income. 

The Women’s Budget Group, an independent network of leading academic researchers and campaigners, said the figures showed young single mums “shoulder most of the burden” of the benefit cap. The study was commissioned by Labour using House of Commons Library data. 

When presented with the research, employment minister Alok Sharma said that employment levels were at a record high.

Janet Veitch, from the WBG, said the charity was renewing its calls for the government to “think about the impact of its policies on women before they make changes, and not leave women and children dependent on food banks and other charities”. 

Employment Minister Alok Sharma said incomes of the lowest paid were rising the fastest

Veitch added: “We are faced with the shameful reality now that increasing numbers slip through the inadequate safety net of social security: even in affluent areas, like Tunbridge Wells – where the food bank actually had to double its storage capacity in 2018.” 

A similar study carried out by WBG had come to similar conclusions, she said. “The fact that single mothers make up 85% of those affected by the Benefit cap comes as no surprise.

“Even a cursory familiarity with patterns of poverty and deprivation in this country would have told you that single mums are disproportionately impacted by poverty and would shoulder most of the burden of the cap,” she said.   

Shadow work and pensions secretary Margaret Greenwood said the analysis was proof in-work poverty was rife in Britain. She said her party would end the benefit cap and introduce a “real living wage” of £10-an-hour. 

George Osborne introduced the national living wage in April 2016. It is currently £7.83-an-hour, and will rise to £8.21-an-hour from April. 

“The Conservatives’ social security freeze is making single working parents poorer,” said Greenwood. “Under this government, in-work poverty is rising faster than employment and more parents are struggling to make ends meet.”

Sharma did not respond to points directly raised by the analysis but said the lowest paid were seeing their incomes rising.

He said: “Thanks to the Conservatives’ action in government and people’s hard work, employment rates are at record high levels, wages are rising faster than inflation, and it’s the lowest paid seeing the fastest rises.

“We’re cutting taxes for millions of working families and businesses, and we have created and boosted the national living wage and funded the biggest pay rise for public sector workers in a decade.” 

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