Benefit cap

Benefit Cap

Benefit Cap 2016

The benefit cap is a limit on the total amount of income from certain benefits a household can receive. 

It is set at a different level depending on whether you live inside or outside London.

The benefit cap is:

  • £442.31 a week if you are a couple or have children and live in London
  • £384.62 a week if you are a couple or have children and live outside London
  • £296.35 a week if you are a single person and live in London
  • £257.69 a week if you are a single person and live outside London

If you are affected by the benefit cap your Housing Benefit or Universal Credit will be reduced.

If you already receive Housing Benefit and are affected by the cap your benefit will be reduced at some point beween now and February 2017. The cap will be rolled out Local Authority by Local Authority, starting with those that have the fewest affected households. You will be contacted by your Local Authority with more information about how and when you will be affected. See when it will be introduced in your area.

Previous benefit cap levels, before 7 November 2016, were £500 per week if you have children or are a couple, and £350 per week for single people with no children.

Benefits included in the cap

The benefits included when seeing if your benefit income exceeds the benefit cap are:

  • Housing Benefit
  • Child Benefit
  • Child Tax Credit
  • Jobseeker's Allowance
  • Incapacity Benefit
  • Income Support
  • Employment and Support Allowance (except when in the support group)
  • Maternity Allowance
  • Severe Disablement Allowance
  • Widowed Parent's Allowance & Bereavement Allowance

Council Tax Support, the replacement for Council Tax Benefit, is not included in the cap. One-off payments like the social fund are also not included.

Exemptions

You will not be affected by the cap if:

  • you are over pension age
  • you are in work and entitled to Working Tax Credit (even if you don't receive a payment because your income is too high)
  • you have recently been in work - see exemptions for current or recent work
  • you, your partner or a child receives a disability benefit - see exemptions for disability
  • you or your partner receive Carer's Allowance (or are entitled but do not receive a payment because of other benefits you receive)
  • you, or your partner receive Guardian's Allowance
  • you live in supported exempt accommodation
  • you do not receive Housing Benefit (unless you claim Universal Credit)

Exemptions for disability

If you receive any of the following disability benefits you will be exempt from the cap:

  • Disability Living Allowance
  • Personal Independence Payment
  • Constant Attendance Allowance
  • Attendance Allowance
  • Industrial Injuries Disablement Benefit
  • Employment and Support Allowance with a support component
  • Armed Forces Independence Payment
  • Limited Capability for Work Related Activity element of Universal Credit
  • War widows and widowers will also be exempt

Exemptions for current or recent work

The benefit cap is intended to increase work incentives so there is an exemption for households that are considered to be "in work." You will be considered in work and be exempt from the benefit cap if you are entitled to Working Tax Credit.

In addition, there is a “grace period” of 39 weeks for people who are over the benefits cap but had been in work for the previous 12 months. The grace period means that if your circumstances change because your job has ended there is a 9 month breathing space before your benefits are reduced. The grace period will include any periods when you are claiming statutory sick pay or statutory maternity/adoption pay.

How is the Benefit Cap applied?

If you receive more than the benefit cap allows then your local council reduce your Housing Benefit until you are brought back within the cap.

Your local council may be able to provide some assistance through a Discretionary Housing Payment if you struggle to meet your housing costs as a result of the benefit cap.

Extra assistance in Northern Ireland

Regulations have been brought in to introduce 'Welfare Supplementary Payments' to be paid to any households with children in Northern Ireland who have their Housing Benefit reduced due to the cap. The payments will match the amount by which their Housing Benefit is reduced, effectively meaning they are no worse off. These payments will remain until 31st March 2020

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