The 'benefit cap' puts a limit on the total amount of welfare benefits many people can claim. Find out how the benefit cap could affect you, and what action you can take if it does.
The benefit cap was introduced across England, Scotland and Wales between April 2013 and October 2013. It may be introduced to Northern Ireland at a later date.
What is the benefit cap?
The benefit cap sets a limit on welfare payments, so that the total amount of benefits that can be received by any individual or family will be limited to a maximum amount of:
- £500 per week for single parents and couples with children
- £350 per week for single people.
Housing benefit will be reduced to prevent the total benefits received going above these limits.
The cap applies if you are out of work and claiming benefits such as income support, employment and support allowance and jobseeker's allowance. Housing benefit counts towards the maximum amount of benefit that can be paid, so people paying high rents are more likely to be affected.
The cap won't apply to you if you work enough hours to be eligible for working tax credit, and some other groups of people also won't be affected – see below for details.
Benefits included in the cap
The following benefits are included in the benefit cap:
- housing benefit (unless you live in supported housing)
- income support (IS), jobseeker's allowance (JSA) and employment and support allowance (ESA)
- child benefit and child tax credits
- guardian's allowance
- carer's allowance
- maternity benefits and widows benefits paid by the Department for Work and Pensions (DWP)
- severe disablement allowance.
Further information on benefits is available from Gov.uk.
Benefits not included in the cap
One-off benefit payments are not included, for example grants and loans from the social fund.
Maternity and adoption benefits paid through an employer are also not included.
Free school meals do not count towards the benefit cap.
When the benefit cap doesn't apply
Families receiving working tax credits – or who work enough hours to claim them – will not be affected by the cap. You will keep your full benefit entitlement even if it is more than £500 per week.
Do you qualify for working tax credits? Use the tax credit calculator to find out.
There will be a 39 week 'grace period' for anyone who has been in work continuously for 12 months and loses their job through no fault of their own. During that period, the cap won't apply.
The benefit cap only applies to people of working age, which means that you are exempt if either you or your partner are over the state pension credit age.
You will be exempt from the cap if you or your family receive certain disability benefits:
- disability living allowance (DLA) – or, from April 2013, personal independence payments
- attendance allowance (AA)
- the support component of employment and support allowance (ESA)
- industrial injuries benefits.
The cap also won't apply if you receive war widows or war widowers pensions.
It is likely that the cap won't apply if you are living in supported accommodation such as supported housing for homeless people run by registered charities, voluntary organisations, housing associations and councils – ask your landlord for further details.
From April 2013, if you claim universal credit, you won't be affected if you have an 'in-work exemption'.
Child maintenance is not included in the cap
Child maintenance payments won't be counted as income when the benefit cap is calculated. If you are a single parent, get advice on child maintenance options.
If you have one or more children that have been assessed as being in exceptional need, you may need to ask the social services department of your local council for help.
How much will the reduction of benefit be?
You can use Gov.uk's online benefit cap calculator to get an estimate of how much your housing benefit may be reduced.
Check if the benefits cap applies to you
Not everyone claiming benefits will be affected by the cap, so it is important to check if it will apply to you.
If your circumstances change, the cap may no longer apply to you. For example, if you are unemployed and then find work, you may be able to claim working tax credit and ask for the cap to be removed.
Need more information about benefits? See the Turn2Us benefits calculator.
Action to take if you are affected
Paying the rent should always be your top priority. If your income is reduced because of the benefits cap and you do not have enough money to pay all your rent, you may fall into rent arrears and face eviction.
If you are facing exceptional hardship, your local council may be able to help you with a discretionary housing payment. This is usually for a short time only. The UK Government has given extra funds to councils so that they can help people with problems caused by the benefit cap, so it may be worth making a claim.
If you are threatened with homelessness, contact your local council's housing options or homelessness service for help and advice.
It is important to work out how much money you will have left to live on after you have paid your rent. You will be expected to make up any shortfall in your housing benefit from your other income. Budgeting will become even more important if your benefits are reduced. Find out about action you can take to reduce your costs.
You may decide that you have no option but to move to a cheaper home. See our A to Z of things to consider if you have to move home.
Some families will face exceptional hardship. It is important to seek advice from a welfare benefits adviser, housing adviser. Use our directory to find help in your area.
Contact the DWP helpline if you have further questions about the benefit cap. The number is 0845 6057064, or textphone 0845 6088551 for people with hearing or speech impairments. Lines are open from Monday to Friday 8am to 6pm.