Benefits capped at 1% for three years
Plans to limit annual increases in working-age benefits to 1% for the next three years have been given the go ahead from MPs.
The Coalition argue the cap is fair because benefits, which historically rise in line with inflation, should not be going up at a faster rate than wages.
The government won a vote on the issue by 328 votes to 262, as parliament rejected Labour's attempt to block the cap on the basis that millions of low-income families would be worse off.
Had the cap not been agreed, benefits were due to rise by 2.2% in April - at a time when public sector pay rises were limited to 1%.
The cap will apply to working-age benefits such as Jobseeker's Allowance, employment and support allowance, income support and will also affect child tax credit and working tax credits.
After the vote, Prime Minister David Cameron tweeted: "The Commons vote to limit benefit rises to 1% while pay is only rising at 1% is fair. Labour have the wrong priorities."
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An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).
Child tax credit
A scheme started in 2003 that sought to replace a raft of other tax credits and benefits, the payout depends on the number of dependant children in a family, and its level of income. The amount of credit is reduced as income increases. It is payable to the main carer of a child, usually the mother, and is available whether or not the recipient is working.