Thousands of families hit by the benefit cap have been left with just 50p a week towards their rent, a BBC investigation has found.
A Panorama survey of hundreds of local councils across Britain discovered that 7,585 families had had their weekly housing benefit cut to this level.
Charities say some families affected could end up losing their homes.
The cuts are part of the government’s drive to get unemployed people back to work by capping their payments.
The limits are £23,000 in London and £20,000 in the rest of the country.
Benefits can only be capped if someone receives housing benefit or Universal Credit.
The amount of money above the limit is taken from housing benefit or Universal Credit.
It means some people can lose all their housing benefit, except for a nominal amount of 50p.
‘Hole in rent’
Alison Garnham, chief executive of the Child Poverty Action Group, said: “Removing people’s housing benefit basically means that people can’t afford their home, so it puts people at risk of homelessness.
“It also means that they have to use money that’s intended to buy food for their kids and for their other living expenses – this has to be used to plug the hole in their rent.”
The government says the benefit cap is fairer because it levels the playing field between families in work and those reliant on benefits.
Welfare delivery minister Caroline Nokes said: “What we sought to do was incentivise work because we know that the outcomes for children will be better if they are in families that are working.
“You have to remember that a household that has only 50p of housing benefit actually is receiving in the region of £20,000 outside London, in total benefits.”
The government estimates that 88,000 households will be affected by the benefit cap – though some experts think the figure will be much higher.
Almost 67,500 households have been capped so far, according to figures provided by the 370 councils that responded to Panorama’s survey.
The 50p-a-week housing benefit
Birmingham has the highest number of households on 50p a week housing benefit – 578 out of 2,968 that are benefit capped.
Leeds is second (223 out of 993) and Manchester is third (179 out of 833).
In North Hertfordshire, 30% of households that are benefit capped are on 50p a week housing benefit – the highest proportion in Britain.
Bolton is the second highest (29%). Sandwell is third (27%).
Source: BBC Panorama
Steve and Kim Carmichael, from Huyton in Liverpool, used to get £500 a week in benefits to look after their four children but their payments were cut by £120 in November under the cap.
Their rent used to be covered by housing benefit but that has been cut to the minimum amount.
Mr Carmichael said: “Now it’s only 50p per week so that’s £2 a month – which they may as well keep. It costs more to send a letter out.”
The family was threatened with eviction at the end of January because of their rent arrears.
They got a payment from a special government fund set up to help those who have been affected by the cap.
But the Discretionary Housing Payment ran out at the end of March and they will now have to apply for more money. If they do not get it, they could lose their home.
‘It soon goes’
Mr Carmichael said the family had been struggling since their benefits were capped.
“£20,000 a year does sound a lot,” she said. “It’s not a lot really, and by the time you’ve paid your gas, your electric, your rent, your council tax, your food shopping, clothes for the kids, school trips and stuff like that, it soon goes.”
Neither of them have worked for almost nine years. Under the rules, the Carmichaels could get their full benefits back if they worked 24 hours a week between them.
Mr Carmichael said he was looking for work, but he has not been able to find a job in the four months since the family was capped.
The government said a range of additional measures had been put in place to support those in the most need.
Panorama: The Benefit Cap – Is it Working? will be shown on Wednesday 5 April at 21:00 on BBC One