Household Benefit Payments

George Osborne MP, the Chancellor of the Exchequer, has announced at the Conservative Party conference that the government will introduce a new cap on welfare benefits. This aims to ensure that workless households no longer receive more in benefits than the average working family receives in pay. The measure will be introduced in 2013 and will be based on the median earned income after tax and national insurance for working families – estimated to be about £500 a week.

The limit will apply to the combined income from the main income benefit, other means-tested benefits such as housing and council tax, as well as child benefit, child tax credits and carer’s allowance. Non-cash benefits, such as free school meals, will not be affected and households with a disability living allowance claimant will be exempt in recognition of the extra living costs incurred by those with a disability. The Treasury claims the cap will apply to about 50,000 workless families, who will lose an average of £93 a week.


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