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23 January 2012 Last updated at 13:19 GMT Work and Pensions Secretary Iain Duncan Smith: "Nobody will be made homeless"
Church of England bishops and some Liberal Democrats will push for child benefit to be excluded from the cap - so as not to penalise large families.
Work and Pensions Secretary Iain Duncan Smith says there are exemptions for some disabled people and those in work.
The annual cap would come into force in England, Scotland and Wales from 2013.
The government was defeated three times on votes on other parts of its flagship Welfare Reform Bill two weeks ago.
But Mr Duncan Smith has said he is determined his reforms will get through Parliament - and defeats will be overturned when the legislation returns to the Commons.
Continue reading the main story Gary O'Donoghue Political correspondent, BBC NewsIf implemented in its current form, the government's benefit cap will save £290m next year, with 67,000 families losing on average £83 a week.
It's not a vast amount of money in the context of a welfare budget that runs to tens of billions of pounds, but its significance goes wider for the government.
First, ministers believe that they are in the same place as a significant portion of public opinion.
Second it reinforces the government's central policy aim of getting more people off benefits and into work by, they would say, encouraging a change in behaviour.
Thirdly it puts pressure on Labour, who know they can't oppose the cap outright, but have ended up having to criticise the implementation, a much less clear-cut position.
For the Lib Dems, this is difficult.
They believe their role is to soften Tory zeal when it comes to the benefits system.
Picking a fight, along with the bishops, also helps to create the fabled "definition" the party needs to secure its identity.
But if no real concessions are wrung, then they could end up looking impotent.
There have been suggestions that some "transitional arrangements" could be introduced for the cap - which applies to working age benefits.BBC News Channel chief political correspondent Norman Smith said it could mean giving families some leeway - possibly a period of grace to find a new home - when the cap is introduced in April 2013.
On Monday the government revised up its estimate of how many households would be affected - from 50,000 to 67,000, although the amount of money they would lose was revised down from £93-a-week to £83-a-week.
The cap would be £500 a week, equivalent to the average wage earned by working households, after tax.
Mr Duncan Smith said most of those affected were people who had never worked - and had no incentive to do so because they were living in expensive properties which they would have to move out of if they lost their housing benefit entitlement.
He rejected suggestions children could be pushed into poverty by the cap, saying that assumed families would not move house.
And he denied that some families would be left homeless, saying there was "no reason" why a family on £26,000 a year would not be able to find suitable accommodation.
Continue reading the main story Has completed its Commons stages and is now in the Report (penultimate) stage in the LordsMinisters have already said they they will overturn Lords defeats in Commons Unless and until agreement on differences is reached the bill is likely to "ping-pong" between the Lords and Commons The Bishop of Ripon and Leeds, the Rt Rev John Packer, has put down an amendment to the Welfare Reform Bill that would exclude child benefit from the overall cap.He said: "Child benefit is a universal benefit. I believe that it's wrong to see it as being a welfare benefit. It's a benefit which is there for all children, for the bringing up of all children and to say that the only people who cannot have child benefit are those whose welfare benefits have been capped seems to me to be a quite extraordinary argument."
And the former Bishop of Hulme, the Right Reverend Stephen Lowe, told the BBC that some parents "perhaps are not particularly capable of working" but had large families.
"The fact that child benefit, which is meant to be attached to the number of children, is being discounted in relation to this particular £26,000 is actually going to damage those children's welfare and put potentially another 100,000 children into poverty."
But Mr Duncan Smith said excluding child benefit would make the cap "pointless" - as it would raise the amount families could receive to an average of about £50,000 a year. He said he wanted to be "fair" to taxpayers on low wages, who were supporting families in homes they themselves could not afford.
Continue reading the main story From April 2013, the total amount of benefit that working-age people can receive will be capped so that households on out-of-work benefits will not receive more than the average household weekly wage. Applies to combined income from the main out-of-work benefits - Jobseeker's Allowance, Income Support, and Employment Support Allowance - and other benefits such as Housing Benefit, Child Benefit and Child Tax Credit, Industrial Injuries Disablement BenefitExemptions for households in receipt of Working Tax Credit, Disability Living Allowance or its successor Personal Independence Payment, Constant Attendance Allowance and war widows and widowers.Forecast to save £290m in 2013-14 and £330m in 2014-15.He told the BBC: "We have a year before this comes in. We now know exactly which families [the cap will affect], what their size is, where they live."It's not about punishing them. It's about saying 'Look, if you live in a house that you couldn't afford if you were in work, then you're disincentivised from taking work'.
"We want people to find work. We want them to be in work."
Mr Duncan Smith also said the public was "overwhelmingly in favour" of the cap.
Former Lib Dem leader Lord Ashdown has said he will vote against the plans, unless there are measures to cushion the impact on those affected.
Labour has said it will not vote against the cap but it has put down an amendment proposing that those at risk of losing their homes should be exempt.
The Bishop of Leicester, Tim Stevens, said Child Benefit should be taken out of the calculationShadow employment minister Stephen Timms told the BBC: "We think that the cap is a good idea, we think the principle is right. But we are very worried about the way the government is going to introduce it, which we think is going to lead to a large number of people losing their homes and having to be rehoused by their local council, ending up costing more."
The housing charity Shelter disputed Mr Duncan Smith's claims about the way "homelessness" is defined by it and the government. The minister told the BBC earlier: "The definition inside government and places like Shelter is that children have to share rooms. For most people who are working, their children share rooms, they would find that a strange definition."
But Shelter chief executive Campbell Robb said that was "simply not true" and the comments were creating "unnecessary confusion".
"Shelter uses the same definition of homelessness as the government, as set out in the Housing Act 1996, passed by the last Conservative government."
The changes would affect England, Wales and Scotland. Northern Ireland has its own social security legislation, but it is expected that what is approved at Westminster would be introduced there too.
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