Croydon will be one of just four UK boroughs to have the government’s new benefit cap introduced in April.
The government had previously said that a household benefit cap of £500 a week would be put in place nationally during the same month.
However the vast majority of the country, including Hackney, Tower Hamlets and Lewisham, has had the implementation delayed until summer 2013 to allow for the trial period.
In a statement, the Department of Work and Pensions said that the London boroughs of Croydon, Bromley, Enfield and Haringey were chosen as the trial boroughs because they “represent a diverse cross-section of areas within London”.
A DWP spokesperson said: “Our welfare reforms are delivering big change – so it’s only right that we implement them in a controlled way.”
The new rules will see the amount people can receive in benefits capped at £500 a week for couple and single parent households – the equivalent of £26,000 per year, the average income after tax and National Insurance earned by working households.
For single adult households the cap will be £350 a week.
No regional adjustment will be made. According to the Greater London Authority, the average weekly rent in Croydon for a three bed house is £258 per week. In Hackney it is £420, in Tower Hamlets it is £393 and in Lewisham it is £300.
Sean Fitzsimons, Labour councillor for Addiscombe told ELL: “I’m not surprised that Croydon is being chosen as we have a local MP here in Croydon Central, who can be guaranteed to publicly support these proposals, even when the cap chances causing real distress to his constituents.
“The benefit cap is an example of the Tory “fairness” policy which means that the poor and disabled are penalised so rich people don’t have to pay more tax.”
Gavin Barwell, Conservative MP for Croydon North said: “I strongly support the introduction of a cap on benefits. It was outrageous that under Labour some out-of-work families could receive more than £100,000 a year in benefits.
“Labour used to be the party of the working man. Today they support families on benefits having higher incomes than those of us who work for a living.”
Certain households, such as those with someone in receipt of Disability Living Allowance, the Support Component of ESA or Working Tax Credit will be exempt.
The DWP also said that £100 million in support has been allocated nationally to help support vulnerable people who will be affected by the changes.