Spouses and partners may be prompted to live apart due to a "couple penalty" in the welfare system created by a £26,000 benefit cap, a think-tank has warned.
The cap on total benefits claimed per household was incoherent, said the Institute for Fiscal Studies (IFS).
But the Government has said it will go ahead with the cap. It overturned a Lords defeat but offered a period of grace of nine months for families to find work or move home.
The cap will affect all couples with four children and no private income who pay at least £127 per week, warned IFS research economist Robert Joyce in a paper. This, he said, was a plausible level for privately rented homes or social housing tenants in London.
Critics said larger families will be driven into cheaper accommodation with the result that benefit claimants will not be able to afford to live in areas of cities like London. The institute said that across Britain, around 67,000 households are predicted to lose £83 a week on average once the limit is implemented in 2013/14.
The cap, which will be £350 a week for childless single people and £500 for others, will save £290 million a year from the Government's £18 billion welfare bill.
Copyright Press Association 2012
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