The cap - which limits benefits to £500 a week for couples and lone parents and £350 a week for single adults - is a key plank of Mr Duncan Smith's welfare reforms. It is expected to affect about 40,000 households.

The disclosure comes amid reports that Mr Duncan Smith is preparing to announce a tough new conditions on the payment of unemployment benefits at the Conservative Party conference next week.

The Daily Mail reported that the long-term unemployed will be told that they must do an unpaid full-time job or lose their benefits.
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