Benefit Cap Rules
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.
From April 2023 the benefit cap is:
- £486.98 a week if you are a couple or have children and live in London
- £423.46 a week if you are a couple or have children and live outside London
- £326.29 a week if you are a single person and live in London
- £283.71 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.
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 (previously Widowed Mother's Allowance and Widow's Pension)
- Universal Credit
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.
You will not be affected by the cap if:
- you are over state pension age (although if you are a member of a couple and only one of you is over pension age you may be affected)
- 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 are in work and, between you and your partner, you are earning at least the amount you would get for 16 hours per week on national minimum wage if receiving Universal Credit
- 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 the Carer Element of Universal Credit (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 or Universal Credit
- you or your partner receive a payment under the War Pension Scheme or Armed Forces Compensation Scheme
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
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 (even if the amount you receive is £0 because your earnings are to high). If you receive Universal Credit you are exempt if you earn at least the amount you would get for 16 hours per week on national minimum wage for your age.
In addition, there is a “grace period” meaning that if your circumstances change because your job has ended there is a 39 week period before your benefits are reduced. This applies to people who are over the benefits cap but had been in work for at least 16 hours a week for 50 out of the 52 weeks immediately before their last day of employment.
You are still counted as employed when on statutory maternity leave, paternity leave, adoption leave or when receiving Statutory Sick Pay (SSP) so if you do not return to work the grace period would start the day after the period of leave ends, or the last day of payment of SSP. However, if you receive Employment and Support Allowance, Income Support or Jobseeker's Allowance during your period of leave, the grace period will start from the date you claim this benefit even if the statutory benefit is still in payment.
How is the Benefit Cap applied?
If you receive more than the benefit cap allows then your local council reduce your Housing Benefit or the DWP reduce your Universal Credit 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.