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Cap on benefits pushes more people into work


New research from the Department for Work and Pensions has claimed that a cap on benefits is providing an incentive for people to get back into work.
The study showed that people who were affected by the cap were 41% more likely to return to work than those who still received the same amount of benefit payments before the cap was introduced.

The cap limits benefits that a household receives to £500 a week, and was introduced in the summer of 2013. The research found that 38% of people who were subjected to the cap said they were doing more to find work, a third were submitting more job applications and one in five went to more interviews. Two in five households who said they had started looking for work because of the cap in February this year had entered employment by August.

Work and Pensions secretary Iain Duncan Smith said:
"By putting an end to runaway benefit claims and introducing a system which guarantees you will always be better off in work, we are incentivising people to find employment.

"Every month hundreds of people who have been affected by the cap are making the positive move into work - gaining the financial security and esteem that comes with a job and a pay packet"

The Institute for Fiscal Studies has disputed the claim, saying the effect of the benefits cap has been “small”. It said the cap affected about 27,000 families in the UK - which represents less than 1% of working-age families who receive housing benefits, and saved around £100m a year.

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