Iain Duncan Smith: 50 families earned £70k in benefits Under the policy, which is the centrepiece of the Coalition's welfare reforms, households are banned from receiving benefits of more than £500 a week, or £26,000 a year. The cap at this level is the equivalent of a working income of almost £35,000 before tax is deducted. By October this year, some 28,000 households had their benefits capped. These included over 9,000 families with more than five children. The latest statistics from the Department for Work and Pensions showed that so far 51 families have had their payouts cut by at least £400 a week, which suggests they were receiving at least £900 in benefits. This is equal to £46,800 a year. A working person would have to be earning about £68,000 before tax to take home that amount of money. About 300 families had their benefits reduced by between £300 and £400 a week. Capping the benefits paid to these 350 families alone is expected to save the taxpayer around £6million a year, the DWP said. Mr Duncan Smith has suggested that welfare pay-outs could be limited to the first two children in a family under future welfare cuts, which economists expect to be necessary in the years ahead. The minister said the policy was "restoring common sense and fairness to the system." "The benefit cap has successfully addressed the ludicrous situation we were in where people were receiving far more in benefits than the ordinary hardworking family earns," he said. The benefit cap sets a very fair limit on what people can expect to get from the state. It is not right that some families were raking in almost double the amount that the average taxpayer takes home.