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'Thousands' hit by government benefit cap now in work

man on Scottish housing estate Image copyright Getty Images
Image caption More than 36,000 households have had their benefits capped since April 2013

More than 3,000 people who were subject to the government's cap on welfare payments have now found work, according to new figures.

It is the first official analysis of what has happened to households since the £26,000-a-year cap was introduced over the summer of 2013.

The Department for Work and Pensions (DWP) said 8,040 households had come off the cap by the end of the year.

The government said it showed the policy was already making an impact.

The figures show that 40% of those coming off the cap have found employment.

In other cases, people's circumstances have changed; for example, they may no longer be claiming housing benefit, or they may have retired.

"It is encouraging to see that people who have been subject to the cap are moving into work, so soon after national implementation was complete," said Lord Freud, the Minister for Welfare Reform.

Labour supports the idea of the cap, but is considering having different levels in different parts of the country.

Changing lifestyles

The cap means that no one household can claim more than £26,000 a year in welfare payments, a total which was close to the average national wage when it came into force.

The cap was introduced in four pilot areas in London in April 2013, and rolled out to the rest of the UK by September.

In total, 36,471 households have had their payments capped, of which 17,102 - nearly half- have been in London.

Today's figures show that 9% of those households had a family member in work by the end of 2013.

The government said it was still expecting to save £225m as a result of the cap by April 2015.

However, it has always said its main aim is to restore fairness to the welfare system.

Nevertheless ministers said they were pleased that some claimants were changing their lifestyles.

"Our reforms are creating an alternative to life on benefits and already we are seeing an increasing number of people changing their circumstances so they are no longer subject to the cap," said Lord Freud.

Under the policy, couples with or without children, or lone parents with a child, are limited to claiming £500 a week in benefits.

Single adults can claim no more than £350 a week.

For the purposes of the cap, the following benefits are taken into consideration: Jobseeker's Allowance, Income Support, Employment and Support Allowance, Universal Credit, Housing Benefit, Child Benefit and Child Tax Credit and Carer's Allowance.

No one who works enough hours to claim working tax credit is subject to the cap.

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