Benefit Cap
In April 2013 a cap was introduced to limit the
total amount in some benefits that
working-age people can receive; even if their full entitlement
would otherwise be higher.
Applies to: England, Scotland and Wales
It is not law yet in Northern Ireland but may be introduced at a
later date. See the NI Direct website for more
information (link opens in a new window).
Administered by: Local Authorities
Index
You can read through this information sheet, or go directly to
the sections you want to read by clicking on these links:
At what amount is the benefit cap applied?
The cap will be set at the average net earned income of working
households:
- £350 per week for a single adult with no children
- £500 per week for a couple or lone parent, regardless of the
number of children they have.
When will the benefit cap be introduced?
The benefit cap is currently in place in 4 London boroughs:
- Bromley
- Croydon
- Enfield
- Haringey
The Government intends that the cap will be introduced in all
other council areas between 15 July and and 30 September 2013.
See benefit cap to be phased in information.
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Which benefits are included in the cap?
To work out if you are within the benefit cap
the Department for Work and Pensions (DWP) will add together your
income from the following benefits:
Any benefits not mentioned above are not included in the
cap.
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Which households are exempt from the cap?
You will be exempt from the cap, regardless of the
amount in benefits you receive, if you, your partner or a
dependant child is:
o Disability Living Allowance
o Personal Independence Payment
o Employment and Support Allowance
(if in the support group)
o Attendance Allowance
o Industrial Injuries Disablement
Benefit
If you are recently unemployed and had been employed for at
least 12 months continuously prior to claiming benefits, the cap
will not be applied until you have been unemployed for 39
weeks.
Carers and the benefit cap
Carers are not exempt from the benefit cap due to being a carer
but they may be exempt if the person they care for is their
partner or a dependent child that they they live with as
that person's disability benefit will exempt the household.
If you are caring for a disabled young person that you live with
but that person is old enough to claim benefits in their own name,
you will be not be exempt from the benefit cap as they don't
form part of your benefit household.
See the Carers UK website information on carers and the benefit cap
(link opens in a new window)
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How will the cap be applied?
If your total weekly income from the benefits included in the cap is more
than your cap level, and you are not exempt from the cap, your Housing Benefit payment will be reduced to
bring you down to your cap level.
Your other benefits can not be reduced so if
you are still over the cap level when your Housing Benefit has been
reduced down to the minimum payment of 50p per week, or you don't
get Housing Benefit, you will still be able to receive more than
the Benefit Cap.
Once Universal
Credit is brought in, the Benefit Cap will be applied
by restricting the Universal Credit payment. This will
enable all households to be capped in full.
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Who will be affected by the cap?
In July 2012 the Government published an impact assessment which
estimated that 67,000 households will be affected by the benefit
cap in 2013/14. In April 2013 the DWP revised this estimate and now
it believes around 40,000 households will be affected.
In a statement, the
DWP explained that there had been a number of policy changes since
the original assessment was carried out (link opens in a new
window), and that the new estimate is based on the number of
people receiving benefit in December 2012.
The July 2012 impact assessment considered the regional impact
of the benefit cap. At that time it was thought that 54% of those
affected will be in Greater London boroughs, 8% in Scotland and
Wales, and 38% spread across the other English regions.
Broadly, the cap will affect large families with several
children who are potentially in receipt of higher than average
amounts of Child Tax Credit and are
more likely to live in larger homes meaning more Housing Benefit.
It is estimated that 27% of households affected will have 5 or
more children. 69% will have 3 or more children.
However, smaller households may still be affected if they live
in high rent areas and are therefore receiving larger
amounts in Housing Benefit.
How do I know if I am going to be affected by the Benefit
Cap?
The Government has written to all claimants they believe might
be affected based on information they have, but this is not up
to date. Your circumstances may have changed already, or may
change before it is implemented in the area where you live. So it
is important to check your situation.
You need to add up your total weekly income from the benefits included in the cap to
see if its over your Benefit Cap
level. You should be able to find this information on your
statement for the account your benefits are paid into, or by
looking at your benefit award letters.
If you are not sure which benefits you receive, or the amounts,
you can use the Turn2us Benefits
Calculator which will indicate on the results page if you
are likely to be affected.
What are my options if I am affected by the Benefit
Cap?
Once you know if you are going to be affected
by the Benefit Cap, and by how much, you then need to find out your
options.
The government are stressing the option of
moving into work in order to avoid the cap but this will not
be possible for some of those affected. Other options include:
- See if you are entitled to a benefit which exempts you from the cap which you may
not already be claiming
- Make up the shortfall in Housing Benefit using other
income or savings or reducing expenditure on non
essentials
- Apply for a Discretionary Housing
Payment
- Move to cheaper accommodation or a
cheaper area
If you are going to be affected by the benefit cap, it is
important that you get advice now from a benefits adviser. You can
use the Turn2us Find an Adviser tool to
find a local one.
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What Government assistance and support is
available?
There is a DWP helpline set up for initial enquiries and
signposting to employment support. Employment support will
involve an interview with an advisor at Jobcentre Plus. Early
access to the Work
Programme (link opens in a new window) will also be
available for those affected by the benefit cap.
Local authorities will be expected to provide housing support to
discuss options for those who are left unable to afford their
rent.
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Last updated: 16 April 2013
Turn2us - to access benefits & grants.
