More than 200,000 households in the UK were living on their universal credit and other benefits at the beginning of the year – the vast majority families with children, figures show.
The cap, which some activists seek to abolish, limits the total amount of benefits that low-paid or inactive applicants can receive.
According to statistics from the Ministry of Labor and Pensions (DWP), the number of households subject to the benefit cap increased by 13% (24,000) in February compared to last November.
It’s also more than twice as many households as it was in February 2020 (79,000) just before the first national coronavirus lockdown was imposed and the number of new applicants skyrocketed.
By February 2021, the universal credit (UC) was limited to 180,000 households and 24,000 of their housing benefits, the DWP said.
The recent quarterly increase was mainly due to UC applicants being re-capped, she added.
Of all households applying for housing benefit or UC, benefits were capped at 2.9% in February 2021, compared with 2.7% in November 2020.
Of these, 83% were families and 59% were single parents.
And 43,000 households were capped for the first time in the quarter to February – an increase of 30% compared to the previous quarter.
UC applicants are exempt if they earn at least £ 617 per month and can have a nine month grace period exempting them if they have earned at least every month in the previous year.
Activists said this record includes, for the first time, people who lost their jobs at the start of the pandemic, claimed UC and were re-limited after their grace period expired.
That number will go up as those periods keep ending, they say.
Household benefits were capped at an average of £ 55 per week in February, the DWP said.
Alison Garnham, executive director of Child Poverty Action Group (CPAG), said the cap has always been an “unjust punishment” for families.
She said, “Most families affected by this cannot work to escape it – often because they are looking after young children or cannot find affordable childcare to combine with work and single parents.
“Thousands more households that have lost their jobs due to Covid-19 are now subject to the cap, although in the pandemic it is much more difficult to find ways to replace their lost income and get exempt.
“Especially in areas with high rents, families with lids lose large amounts of social assistance, and that is catastrophic for the children affected. The government must abolish the benefit cap to prevent more children from being harmed by impoverishment. “
The CPAG estimates that removing the cap would lift 100,000 children out of deep poverty (below 50% median income) and 170,000 out of very deep poverty (below 40% median income) at a cost of £ 575 million.
Jon Sparkes, CEO of Crisis, said behind the numbers are “hundreds of thousands of people struggling to keep their roofs over their heads.”
He added: “We urgently need a strategy to provide the truly affordable housing needed to end homelessness, as well as more financial assistance to hundreds of thousands of lagging tenants to help them come back from the brink.
“The UK government must also permanently exempt people who sleep poorly or are stuck in temporary accommodation from the benefit cap, to give them a chance to end their homelessness for good.”