The Benefit Cap is reducing on 7th November 2016, which means households who are currently subject to the cap will lose income of between £54 and £115 per week. More benefit claimants will be affected by the cap once it is lower.
What is the Benefit Cap?
The Benefit Cap limits the total amount of some benefits and tax credits that working-age people can receive, even if their full entitlement would otherwise be higher.
It applies to all benefit claimants who are working-age and receiving Housing Benefit or the Universal Credit Housing Costs element, unless they:
- Are working enough hours to qualify for Working Tax Credit, or
- Are claiming Universal Credit and earn at least £430 per month, or
- Have someone in their household who is receiving a disability benefit, or
- Their partner is over Pension Credit age
When you are subject to the Benefit Cap, your Housing Benefit or Universal Credit award is reduced to bring your total benefits in line with the cap amount.
You can read more about which benefits are included in the cap and who is exempt on the Benefit Cap page of our website.
How is it changing?
The current cap is set at:
- £500 per week (£26,000 per year) for couples and lone parents
- £350 per week (£18,200) for single adults
The new cap is set at:
- £442.31 per week (£23,000 per year) for couples and lone parents in Greater London
- £384.62 per week (£20,000 per year) for couples and lone parents outside Greater London
- £296.35 per week (£15,410 per year) for single adults in Greater London
- £257.69 per week (£13,400 per year) for single adults outside Greater London
What can I do?
If you are or will be subject to the benefit cap, you may struggle to meet your day-to-day costs when the cap is reduced. Make sure you are receiving the right amount of benefits by using our Benefits Calculator.
Check whether you are eligible for benefits that are not included in the cap. Examples of benefits that are not included in the cap are:
Contributory benefits like contribution-based Jobseeker’s Allowance
Statutory benefits like Statutory Sick Pay or Statutory Maternity Pay
Disability benefits like Personal Independence Payment.
If you are struggling to pay your rent because the cap reduces your Housing Benefit or the Housing Costs element of your Universal Credit, you can apply to your local council for Discretionary Housing Payment which may be awarded to top up your Housing Benefit or Universal Credit for a few months. Your council may also run a Local Welfare Assistance scheme to help people in emergencies.
Remember that if you are working enough hours or earning enough money, you become exempt from the benefit cap – so you may be better off working even if you have to pay for childcare. If you stop working or earning enough after a year, you could have a nine month grace period before the cap affects you again.
If you’re not sure whether you can afford to make ends meet and you need advice about what to do next, you can use our Find an Adviser to find a benefits advisor near you.
Lots of people had their tax credits claims stopped in August because they failed to renew their claim before the 31 July deadline.
If your claim for tax credits has stopped and you are still entitled, you can make a new claim. You can request a claim form by calling HM Revenue and Customs (HMRC) on 0345 300 3900 or using their online tax credits tool.
If you think that your tax credits claim should not have stopped at all, you may want to challenge the decision to stop your claim, for example, because your renewal was late for a good reason. You can use our Find an Adviser tool to find a benefits advisor near you to help you challenge the decision.