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If benefits in general were at that level, then yes, the system would be broken. Similarly, the tax system would appear to be broken, when checking the tax paid by Amazon and Google. The examples above are outliers, which need to be dealt with as exceptions. However, they are both used instead...

Are any of the kids registered as disabled? I assume that would probably be the only reason to increase the payments above the norm

I had exactly the same thoughts. I assume Universal credit was paying a private landlord a chunk of that, but even then, I find it hard to understand how you can get to £7k.