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Four in every five families must be made exempt from the Tories' cruel benefit cap, a powerful report warns today.

MPs have demanded a major overhaul to make the £20,000-a-year limit apply only to those expected to look for work.

That would exempt 82% of claimants - many of whom have seen their benefits cut despite having poor health or caring for a loved one.

The Commons Work and Pensions Committee warned these people have "no way to escape" the cap - and the claim the cap is fair "does not stand up to scrutiny”.

MPs also said it is unclear if the cap is saving taxpayers money and called for a "full audit”.

(Image: Blend Images)

The report added: "We are hearing harrowing stories from all over the country of people going hungry, parents struggling to feed their children, families shivering in their homes because they can’t afford heating, and tenants building up crippling rent arrears.

“The Government must now look at the impact of the benefit cap in the round and consider whether, in its current form, it is achieving what it set out to do."

Launched in 2013, the cap - £23,000 in London and £20,000 outside - has been blamed for "social cleansing" of inner-city areas.

Some 73% of the 58,000 people who had housing benefit capped in November were single parents - and the majority had at least one child under five.

Committee chairman Frank Field said: "It would be difficult to think of a more cruel cut."

In the report, MPs said the Department for Work and Pensions (DWP) claims to have saved 0.1% of the total welfare bill through the cap.

However, this figure did not include “additional costs” the cap created, MPs said.

And while 4.7% of claimants move into work because of the cap, “the vast majority do not”, the report said.

The MPs also slammed DWP minister Justin Tomlinson’s ”flippant" claim that people had avoided the cap by renegotiating rent or taking in a lodger.

“These options are, at best, unrealistic,” the report said.

The committee also called on the government to do more to monitor the cap’s impact, including if people are in debt or going without food or heating.

And the MPs called for all people in temporary accommodation to be exempt.

(Image: PA)

A DWP spokesperson said: “The benefit cap restores fairness so that it pays to work and still ensures there’s a safety net for the most vulnerable.

“We will carefully consider the report’s findings and respond in due course. People receiving certain disability benefits are already exempt from the cap.”