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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 is 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.

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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 the amount you have been awarded of 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:

  • Entitled to Working Tax Credit (a claim must be made); or
  • Receiving one of the following benefits

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

o Armed Forces Compensation Scheme Payments

o Armed Forces Independence Payment

o War Disablement Pension

o War Widow's or Widower's Pension

If you are recently unemployed you may also be exempt for a limited period, see 'Grace period' below.

Grace period

If you are recently unemployed the benefit cap won't be applied for the first 39 weeks if you:

  • were in paid employment or self-employment (this doesn't have to be full-time) for 50 of the 52 weeks immediately before your last day of work; and
  • during that time you were not entitled to Income Support; Jobseeker's Allowance or Employment and Support Allowance, for 1 day or more in 3 or more different weeks. For example, if you receive Jobseeker's Allowance for 1 day in 3 different weeks in the 52 week period you will not be entitled to a Grace Period

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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How do I know if I am going to be affected by the Benefit Cap?

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, in the notes next to any Housing Benefit entitlement, if you are likely to be affected.

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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
  • See if your landlord will agree to reduce your rent
  • Move to cheaper accommodation or a cheaper area

It is important that you get advice 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: 4 April 2014

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