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Benefit payments cap rollout begins in London Benefit payments cap rollout begins in London
(about 1 hour later)
A government-imposed cap on many benefit payments nationwide is beginning in four London boroughs.A government-imposed cap on many benefit payments nationwide is beginning in four London boroughs.
Couples and lone parents in Haringey, Enfield, Croydon and Bromley will not receive more than £500 a week while a £350 limit applies to single people.Couples and lone parents in Haringey, Enfield, Croydon and Bromley will not receive more than £500 a week while a £350 limit applies to single people.
The cap is set to be imposed across England, Scotland and Wales between July and September.The cap is set to be imposed across England, Scotland and Wales between July and September.
Jobseeker's allowance, income support, child and housing benefit count towards it, but not disability benefits.Jobseeker's allowance, income support, child and housing benefit count towards it, but not disability benefits.
The move is part of efforts to cut spending; the amount is said to reflect the average working household income.The move is part of efforts to cut spending; the amount is said to reflect the average working household income.
'Difficult choices'
Employment minister Mark Hoban told BBC Radio 4's Today programme: "People want to see a benefits system that's fair, affordable and gets people into work. And we are seeing that."
He added: "This is about fairness. There are people in this country making difficult choices about where they live and who don't claim housing benefits."
"If they want to escape the benefits cap, the best way to do it is to move into work," Mr Hoban said.
The cap is not yet law in Northern Ireland.The cap is not yet law in Northern Ireland.
The Department for Work and Pensions has said about £90bn was paid out in benefit payments to people of working age and their families in 2009-10; it hopes the cap will save it about £110m a year. The Department for Work and Pensions says about £90bn was paid out in benefit payments to people of working age and their families in 2009-10. It hopes the cap will save about £110m a year.
'Strong incentive' Jobseeker's allowance, income support, child benefit and housing benefit are on a long list of payments which count towards the calculation of the cap, which will result in an average cut of £93 for the 40,000 London households initially affected.
Jobseeker's Allowance, Income support, child benefit and housing benefit are on a long list of payments which count towards the calculation of the cap, which will result in an average cut of £93 for the 40,000 London households initially affected. People on disability benefits will be exempt from the cap. To encourage people to seek work, ministers have decided that people with a job who receive Working Tax Credit will also not be affected.
BBC News personal finance correspondent Simon Gompertz says people on disability benefits will be exempt from the cap. Ministers claim that the threat of the introduction of the cap has already spurred 8,000 claimants who would have lost out to find jobs.
As a way of encouraging people to seek work, ministers have decided that people with a job who receive Working Tax Credit will also not be affected, our correspondent added. Labour argues that a better way to cut the benefits bill would be to offer guaranteed jobs to the long-term unemployed.
Ministers say that the threat of the introduction has already spurred 8,000 claimants who would have lost out to find jobs.
The government has revealed it is to spend an extra £2m as part of the initial roll-out.
Speaking last week, Work and Pensions Secretary Iain Duncan Smith said: "The benefit cap sets a clear limit for how much support the welfare state will provide.
"But it's also a strong incentive for people to move into work and even before the cap comes in we are seeing thousands of people seeking help and moving off benefits.
"We have a very clear message: 'We will provide support to those who need it, but the days of outrageous claims giving people incomes far above those of working families are over'."
Labour has argued that a better way to cut the benefits bill would be to offer guaranteed jobs to the long term unemployed.