Lone parents with young children were subject to the benefits cap despite there being no official requirement for them to find work. Photograph: Thanasis Zovoilis/Getty Images

The governments policy of imposing the benefit cap on tens of thousands of lone parents with children under the age of two is unlawful, discriminatory and has resulted in real damage to the families affected, the high court has ruled.

The benefit cap, which limits the total amount households can receive in benefits to 20,000 a year, or 23,000 in Greater London, was envisaged as an incentive to persuade unemployed people to move into work.

However, Mr Justice Collins said in his judgment that the policy visited real misery to no good purpose on lone parents with very young children who were subject to the cap despite there being no official requirement for them to find work.

Lone parents with children under two did not qualify for free childcare and so would find it difficult and often impossible to juggle working the minimum 16 hours a week required to evade the cap while finding means to care for the child.

He said: The evidence shows that the cap is capable of real damage to individuals such as the claimants. They are not workshy but find it, because of the care difficulties, impossible to comply with the work requirement.

Most lone parents with children aged under two were not the sort of households the cap was intended to cover and it was obvious that it would exacerbate poverty. Real misery is being caused to no good purpose.

The Department for Work and Pensions (DWP) has been given leave to appeal against the ruling. A spokesperson said: We are disappointed with the decision and intend to appeal. Work is the best way to raise living standards, and many parents with young children are employed.

The benefit cap incentivises work, even if its part-time, as anyone eligible for working tax credits or the equivalent under universal credit is exempt. Even with the cap, lone parents can still receive benefits up to the equivalent salary of 25,000, or 29,000 in London, and we have made discretionary housing payments available to people who need extra help.

Campaigners said they hoped the ruling would lead to the abolition of the benefit cap. Although the principle of a cap is popular with the public, critics have argued that the benefit cap is a powerful driver of poverty and destitution. Official estimates published earlier this year show 50,000 low-income families caring for an estimated 126,000 children were at risk of serious financial hardship after being trapped by the lower benefit cap.

Rebekah Carrier, the solicitor acting on behalf of the families, said: The benefit cap has had a catastrophic impact upon vulnerable lone parent families and children across the country. Single mothers like my clients have been forced into homelessness and reliance on food banks as a result of the benefit cap.

Thousands of children have been forced into poverty, which has severe long-term effects on their health and wellbeing.

She added: We are pleased that todays decision will relieve my clients and other lone parent families around the country from the unfair impacts of austerity measures which have prevented them from being able to provide basic necessities for their children.

The challenge was brought by four lone parent families with children under the age of two. Two of the families had become homeless because of domestic violence. As a result of their caring responsibilities and the cost of childcare, they were unable to work the 16 hours a week required to evade the cap.

They argued that the governments failure to exempt them from the cap had a profound impact on them and failed to take into account the disproportionate impact of the benefit cap on lone parents, who are overwhelmingly women.

An estimated 26,000 lone parents with children under the age of two have been affected by the benefit cap since it was introduced in 2013.

Alison Garnham, chief executive of the Child Poverty Action Group charity, said: In exposing the absurdity and cruelty of the benefit cap, we hope this case is the beginning of the end for this nasty policy. It is a policy that punishes the vulnerable for being vulnerable and even fails on its own terms.

Dalia Ben-Galim, director of policy at Gingerbread, the charity for lone parents, which gave evidence in the case, said: This is a fantastic result that offers real hope for some of the most vulnerable families in the UK. When it comes to single parents, the benefit cap rules risked pushing them into ever deeper poverty.

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Benefit cap on lone parents of under-twos is unlawful, court rules - The Guardian