MPs stick to £26,000 top limit on benefits

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MPs asserted their authority over the House of Lords last night to reinstate coalition plans for a £26,000 cap on benefits.

The Commons overruled a series of Lords amendments to the Government’s welfare reforms on employment and support allowance (ESA) and child maintenance charges.

It also removed the exemption for child benefit from the £26,000-a-year cap, although Employment Minister Chris Grayling offered concessions on the policy.

The Welfare Reform Bill will now go back to the Lords, where the Government will cite “financial privilege”, meaning peers cannot block the measures because they affect tax and spending decisions.

But, amid concerns from Lib Dem deputy leader Simon Hughes and Tory MP Mark Field, Mr Grayling announced a number of concessions on the cap, so families would receive a 12-month grace period to find work, while those who lost their job through no fault of their own after being employed for a year would be given nine months in which to find new employment.

Households entitled to working tax credit would be exempted from the cap along with working households on universal credit after 2013.

War widows and widowers would also be exempted while households receiving the support component of employment and support allowance (ESA) but not disability living allowance would also not be penalised, he said.

MPs also reversed a series of changes to the ESA made in the Lords. The Bill as now drafted means people recovering from an illness or injury can get contributory ESA for one year, half the period the Lords decided. The limit would also apply to cancer patients, despite moves by peers to exempt sufferers from the time limit.

MPs also reinstated plans to charge parents for using the Child Support Agency.