New House of Commons Library data analysis, shared with the Standard, has revealed Brent Central as the UK constituency with the most households affected by the cap, with 1,149 couples and families taking home around £200 per month less than if it were lifted.
Introduced in 2013 as an incentive to job-seek, the cap limits the amount any household can receive in total benefits, including Universal Credit, Housing Benefit and Child Benefit. It means London couples and families can receive a maximum of £1,916.17 a month.
Critics argue the cap is unfair in the capital as it does not fully adjust for the high cost of London rents.
The research found nine of the top 10 areas most affected by the cap were in London, with Hackney North and Stoke Newington seeing 708 households affected, 652 in Edmonton, and 635 in Ealing Central and Acton.
East Ham saw the highest financial sum lost by households per week as a result of the cap, at £72.50. In total, the analysis showed 20,165 households in the capital were impacted.
These figures are likely to be even higher today as a result of the economic impact of the Covid-19 pandemic.
It comes as the Social Security Advisory Committee, the Government advisory body on welfare policy, warned that the “full value” of welfare payments – increased as the UK went into lockdown in March to help families – “is not benefiting all cases because of the application of the benefit cap, particularly in areas with high rental costs”.
Reacting to the new analysis, Liberal Democrat MP and party leadership candidate, Layla Moran, called on the Government to lift the cap to help families this summer.
She said: “Thousands of children are growing up in poverty in London because of the government’s heartless cap on benefits.
“The Government must urgently lift the cap and two-child limit, so those struggling to get by because of this crisis aren’t forced to choose between paying the rent or putting food on the table.”
In a response to Social Security Advisory Committee this week, Work and Pensions secretary, Therese Coffey, said that the Government has “no plans to change the benefit cap”.
She stated that those struggling to meet rental costs could seek help from their local authority by applying for a discretionary housing payment.
She wrote: “Exemptions continue to apply for the most vulnerable claimants entitled to disability benefits and carer benefits.”
A Department for Work and Pensions spokesperson said: “The benefit cap, up to the equivalent salary of £28,000 in London, provides fairness for hard-working taxpaying households and a strong work incentive, whilst providing a reasonable safety net of support for the most vulnerable.
“We remain committed to supporting the most vulnerable in society, which is why we currently spend over £95 billion a year on the benefits system, with over 1.8 million new applicants being supported by the system in the last month.”