Welfare reform: Lords bid for benefits cap concessions

Peers will press for changes to plans for a £26,000 cap on the benefits families can receive when the measure is debated in the House of Lords later.

Church of England bishops and some Liberal Democrats will push for child benefit to be excluded from the cap - so as not to penalise large families.

Work and Pensions Secretary Iain Duncan Smith says there are exemptions for some disabled people and those in work.

The annual cap would come into force in England, Scotland and Wales from 2013.

The government was defeated three times on votes on other parts of its flagship Welfare Reform Bill two weeks ago.

But Mr Duncan Smith has said he is determined his reforms will get through Parliament - and defeats will be overturned when the legislation returns to the Commons.

There have been suggestions that some "transitional arrangements" could be introduced for the cap - which applies to working age benefits.

BBC News Channel chief political correspondent Norman Smith said it could mean giving families some leeway - possibly a period of grace to find a new home - when the cap is introduced in April 2013.

On Monday the government revised up its estimate of how many households would be affected - from 50,000 to 67,000, although the amount of money they would lose was revised down from £93-a-week to £83-a-week.

The cap would be £500 a week, equivalent to the average wage earned by working households, after tax.

Mr Duncan Smith said most of those affected were people who had never worked - and had no incentive to do so because they were living in expensive properties which they would have to move out of if they lost their housing benefit entitlement.

He rejected suggestions children could be pushed into poverty by the cap - saying that assumed families would not move house.

And he denied that some families would be left homeless, saying there was "no reason" why a family on £26,000 a year would not be able to find suitable accommodation.

The Bishop of Ripon and Leeds, the Rt Rev John Packer, has put down an amendment to the Welfare Reform Bill that would exclude child benefit from the overall cap.

He said: "Child benefit is a universal benefit. I believe that it's wrong to see it as being a welfare benefit. It's a benefit which is there for all children, for the bringing up of all children and to say that the only people who cannot have child benefit are those whose welfare benefits have been capped seems to me to be a quite extraordinary argument."

And the former Bishop of Hulme, the Right Reverend Stephen Lowe, told the BBC that some parents "perhaps are not particularly capable of working" but had large families.

"The fact that child benefit, which is meant to be attached to the number of children, is being discounted in relation to this particular £26,000 is actually going to damage those children's welfare and put potentially another 100,000 children into poverty."

But Mr Duncan Smith said excluding child benefit would make the cap "pointless" - as it would raise the amount families could receive to an average of about £50,000 a year. He said he wanted to be "fair" to taxpayers on low wages, who were supporting families in homes they themselves could not afford.

He has admitted his plans could face defeat in the Lords on Monday.

He told the BBC: "We have a year before this comes in. We now know exactly which families [the cap will affect], what their size is, where they live.

"It's not about punishing them. It's about saying 'Look, if you live in a house that you couldn't afford if you were in work, then you're disincentivised from taking work'.

"We want people to find work. We want them to be in work."

Mr Duncan Smith also said the public was "overwhelmingly in favour" of the cap.

Former Lib Dem leader Lord Ashdown has said he will vote against the coalition's plans for a benefits cap, unless there are measures to cushion the impact on those affected.

Labour has said it will not vote against the cap but it has put down an amendment proposing that those at risk of losing their homes should be exempt.

Shadow employment minister Stephen Timms told the BBC: "We think that the cap is a good idea, we think the principle is right. But we are very worried about the way the government is going to introduce it, which we think is going to lead to a large number of people losing their homes and having to be rehoused by their local council, ending up costing more."

The changes would affect England, Wales and Scotland. Northern Ireland has its own social security legislation, but it is expected that what is approved at Westminster will be introduced there too.

A small number of provisions will apply directly to Northern Ireland, regarding the abolition of benefits, state pension credit, tax fraud investigation and information sharing about tax fraud.

Two people on my rather modest salary would be on over £35k.

He rejected suggestions children could be pushed into poverty by the cap

Job secuirty isn't exactly what it was so finding it necessary to move regularly is going be detrimental to childrens education nto to mention also being incredibly stressful for all concerned.

I'm no more keen to have people deciding to 'live on the dole' for their entire lives than most other people but this seems like a rather bad way to go about changing the situation.

I've think I've recovered a little now.
As above, capping benefits at £26k (equiv to £35k salary) - I could happily stop working and just live off benefits in that case. Why the fudge should I go to work?
I don't agree with the idea of a Poor house but definitely feel the idea should be that working even a minimum paid job is far better than being on benefits.