Politics and Insights

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In March, MPs agreed a 2015-16 welfare cap of £119.5bn, which excluded the state pension and some unemployment benefits, such as Jobseeker’s Allowance (JSA) and Housing Benefit paid to JSA claimants, but it covers all other benefit expenditure. That also includes administration costs, staffing costs and so forth.
Social security benefits are by their nature needs-led, so if individuals meet the eligibility criteria for a benefit, and apply, then they will receive that benefit. The welfare cap does not change this one bit. All it does, essentially, is require the Government either to justify where expenditure increases by more than forecast, or propose further welfare cuts to bring expenditure back into line. It will not turn social security into a cash-limited budget.
The cap was set in line with the Office for Budget Responsibility’s forecasts of benefit expenditure, with an additional “forecast margin” of two per cent added on. This means that…

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