Work and Pensions Secretary confirms there are no plans to extend benefit cap grace period in universal credit

While feasibility of extension has been considered, Secretary of State says resources will remain focused on Department’s ‘Plan for Jobs’, and that getting claimants back to work remains her ‘primary concern’

The Work and Pensions Secretary Dr Thérèse Coffey has confirmed that she has no plans to extend the benefit cap grace period, as it comes to an end for the first cohort of first-time universal credit claimants in March 2020 following the outbreak of coronavirus (COVID-19).

In a written answer last month, Employment Minister Mims Davies advised that it is not possible, other than at disproportionate cost, for the DWP to estimate how many of the 160,300 universal credit households that made a claim for the first time in late March 2020 that have a benefit cap grace period due to end in December 2020 would have been capped if the grace period had not applied.

While this prompted the Chair of the Work and Pensions Select Committee Stephen Timms to write to the Secretary of State to seek clarification of why an estimate was not possible, in her response Dr Coffey says that -

‘The Department is not able to provide information on the number of households who will be newly subject to the benefit cap at the end of their grace period because any estimate does not account for changes to personal circumstances which would see some claimants continue to be exempt. Consequently, the assessment you refer to has not been made.’

Dr Coffey adds that the proportion of individuals capped nevertheless remains low in comparison to the overall universal credit caseload, at around 3 per cent, and goes on to confirm that she has no plans to extend the grace period, advising that -

‘There has been consideration of the feasibility of amending the grace period both before and after the recent recommendation from the Social Security Advisory Committee. This would require significant resource capacity that would impact on other priorities, such as our Plan for Jobs. Getting our claimants back into work remains my primary concern and, of course, returning to employment will significantly increase the likelihood of a household not being affected by the cap.’

NB - responding to Mr Timms' enquiry as to when a statutory review of benefit cap levels will be undertaken, Dr Coffey advises that there is a duty to undertake a review at least once in each Parliament, and this will happen ‘at the appropriate time’.

Mr Timms’ letter and Dr Coffey’s response are available from parliament.uk