Homelessness risk to 300,000 children over benefits cap

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Hundreds of thousands of vulnerable children could be left homeless as a result of the new benefits cap coming into force next week, warns new research.

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Hundreds of thousands of children could be left homeless due to benefits cap, the analysis claims

According to an analysis by the Chartered Institute of Housing (CIH), nearly 320,000 children live in households likely to be affected by the cap, which in some cases will see families lose up to £115 a week, pushing them 'deeper into poverty' and making housing unaffordable. 

Under the new lower overall benefit cap, coming in next Monday (7 November), household benefits will be limited to £23,000 in London and £20,000 outside the capital. Currently the limit is set at £26,000 a year for couples, with or without children, and single parents. 

The benefits cap was announced by the former chancellor George Osborne last year.

The institute's analysis shows that 116,000 families across England, Scotland and Wales in social rented and privately rented properties will be affected by the new cap. Families living in London and those with two and three children will be worse hit, it claims. 

The CIH says that despite the cap being set at £3k higher in London, the money is still not enough to fully compensate for the greater cost of housing in the capital. 

Terrie Alafat, chief executive of the Chartered Institute of Housing (CIH), warns that the new cap could put 'many families at serious risk of losing their homes and render housing in significant parts of the country unaffordable for those affected.' 

She said, 'The results of our research are extremely worrying. It shows that the reduction in total benefits is going to hit some of the most vulnerable families of all sizes across England, Scotland and Wales. 

'These families will lose out when the cap comes into effect and in many cases will straight away face a substantial gap between their rent and the help they receive to pay for their housing. 

'Worryingly, our analysis shows many families could be one redundancy or a period of ill health away from being in this situation. 

'We are seriously concerned that this could have a severe impact on these families, make housing in large sections of the country unaffordable and risk worsening what is already a growing homelessness problem.' 

Ms Alafat added, 'This is a measure which seriously risks undermining the government’s commitment to make society fairer for families in Great Britain and we suggest that they look at this urgently.' 

Within its analysis it gives examples of how the cap will affect families in different parts of the country. 

A couple with three children it says will have £50.80 remaining for their housing costs, once out-of-work benefits have been taken into account, before they breach the £20,000 cap.  However a three-bed property in Leeds rents for around £151.50 per week, leaving a shortfall of £100.70. The same family would face a shortfall of £89.04 in Northampton or £75.78 in Leicester.

A couple with two children outside of London will have £117.92 per week for their housing costs. However a two-bedroom property in Reading would cost around £188.33 to rent a week, leaving a shortfall of £70.41. The same family would face a shortfall of £38.64 in Southampton or £33.58 in both Milton Keynes and Bristol. 

The institute's analysis is based upon an estimate of the number of households affected by the cap, with a focus on the impact on one-four child families. As well as the cost of renting for two and three-child families in each local authority in England to test whether the cap provided sufficient room to cover the rent. 

Scotland 

The analysis also includes a separate breakdown of how families in Scotland will be affected. 

According to the CIH, the benefits cap will hit 6,700 families across the social rented and private rented sectors in Scotland. Almost 2,000 children live in these households. 

Annie Mauger, executive director of CIH Scotland, said, 'The results of our research are extremely worrying. It shows that the reduction in total benefits is going to hit some of the most vulnerable families of all sizes across Scotland and the UK as a whole. 

'In many cases, these families will immediately face a substantial gap between their rent and the help they receive to pay for their housing. 

'We are seriously concerned that this could have a severe impact on these families, make housing in large sections of the country unaffordable and risk worsening what is already a growing homelessness problem.'

A Department for Work and Pensions Spokesman said, 'We are committed to helping people who are able to work into jobs and the benefit cap provides a clear incentive to move into employment for those who can. Anyone eligible for working tax credits, carers allowance, and most disability benefits are exempt from the cap.

'The benefit cap restores fairness to the system and the new limit will ensure the amount people on out-work-benefits can claim better reflects the circumstances of many working families in the country. Even with the new cap, households can still receive benefits up to the equivalent salary of £25,000, or £29,000 in London.'

Commenting on the analysis by CIH, Dalia Ben-Galim, director of policy at Gingerbread, a charity that supports single parents, said, 'We are very concerned about the impact of the benefit cap on single parent families. Many of those affected have children aged under five and many will struggle to find childcare that fits with the jobs available. The reality is that many children will face homelessness and poverty as a result of the benefit cap.'

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