Benefit cap

The benefit cap is the maximum amount of benefits that working-age claimants and their benefit unit can receive.[1] A benefit unit is the claimant, their spouse/civil partner/cohabiting partner and any dependent children living in the same property.

A claimant's housing benefit or universal credit is reduced to ensure that the total amount of benefits received is not more than the benefit cap level.

If a claimant is not in receipt of housing benefit or universal credit the cap cannot be applied, even if their income from benefits exceeds the level of the cap.

The Supreme Court held that the benefit cap regulations are not incompatible with Article 14 ECHR (protection from discrimination). The fact that they affect a greater number of women than men has an objective and reasonable justification.[2]

The benefit cap levels depend on whether the claimant lives in Greater London or elsewhere in the UK.

The current rates came into force on 1 April 2023. They only apply to universal credit in relation an assessment period that starts on or after 10 April 2023. For housing benefit where rent is paid at intervals of a week or multiples of a week, the new rates apply from 3 April 2023.[3]

Universal credit

For universal credit claimants resident in Greater London, the benefit cap is:[4]

• £2110.25 per month for couples with or without children living with them (either member of the couple must be resident in Greater London)

• £2110.25 per month for lone parents with children living with them

• £1413.92 per month for single adults without children living with them

For universal credit claimants not resident in Greater London, the benefit cap is:

• £1835 per month for couples with or without children living with them

• £1835 per month for lone parents with children living with them

• £1229.42 per month for single adults without children living with them

Housing benefit

For housing benefit claimants in Greater London the benefit cap is:[5]

• £486.98 per week for couples with or without children living with them

• £486.98 per week for lone parents with children living with them

• £326.29 per week for single adults without children living with them

For housing benefit claimants not resident in Greater London, the benefit cap is:

• £423.46 per week for couples with or without children living with them

• £423.46 per week for lone parents with children living with them

• £283.71 per week for single adults without children living with them

The benefit cap amount changed on 7 November 2016 and 1 April 2023.

Housing benefit between 7 November 2016 and 31 March 2023

For housing benefit claimants in Greater London the benefit cap was:[6]

• £442.31 per week for couples with or without children living with them

• £442.31 per week for lone parents with children living with them

• £296.35 per week for single adults without children living with them

For housing benefit claimants not resident in Greater London, the benefit cap was:

• £384.62 per week for couples with or without children living with them

• £384.62 per week for lone parents with children living with them

• £257.69 per week for single adults without children living with them

Universal credit between 7 November 2016 and 31 March 2023

For universal credit claimants resident in Greater London, the benefit cap was:[7]

• £1916.67 per month for couples with or without children living with them (either member of the couple must be resident in Greater London)

• £1916.67 per month for lone parents with children living with them

• £1284.17 per month for single adults without children living with them

For universal credit claimants not resident in Greater London, the benefit cap was:

• £1666.67 per month for couples with or without children living with them

• £1666.67 per month for lone parents with children living with them

• £1116.67 per month for single adults without children living with them

Rates before 7 November 2016

Before 7 November 2016, the same benefit cap levels applied across the UK.

For universal credit claimants, the benefit cap was set at:

• £2167 per month for couples with or without children living with them

• £2167 per month for lone parents with children living with them

• £1517 per month for single adults without children living with them

For housing benefit claimants, the benefit cap was set at:

• £500 per week for couples with or without children living with them

• £500 per week for lone parents with children living with them

• £350 per week for single adults without children living with them

The claimant's housing benefit is reduced to ensure that the total amount of benefits they receive is not more than the benefit cap level.[8]

If a claimant is in receipt of universal credit, the cap is applied to ensure the universal credit paid does not exceed the cap.[9] However, any reduction applied to a claimant's universal credit to bring it to the benefit cap level is to be minus the amount of any childcare costs element for an assessment period.[10] If the childcare costs element is more than the excess benefit, then no reduction is applied.

When the cap is applied

Local authorities may determine whether the benefit cap applies if they have information suggesting that it may do, but are not required to apply the cap (ie reduce the claimant's housing benefit) until notified by the Department for Work and Pensions (DWP) that it applies to a claimant.[11]

Dual cases in different local authorities

Where a claimant has two housing benefit claims, each under a different local authority area, the DWP has issued guidance as to how the cap is to be applied.[12]

The cap applies to the combined total income received by the benefit unit from the following benefits:

• bereavement allowance/widowed parent's/mother's allowance

• child benefit

• child tax credit

• employment and support allowance (both contribution-based and income-related) except where the 'support component' has been awarded

• housing benefit

• incapacity benefit

• income support

• jobseeker's allowance (contribution-based and income-based)

• maternity allowance

• severe disablement allowance

• universal credit

• widow's pension

The following benefits and payments are to be disregarded when calculating the cap:

• discretionary housing payments

• localised council tax support

• social fund payments

• winter fuel payments

• statutory maternity, paternity or adoption pay

• statutory sick pay

• payments made under the cost of living support package

Housing benefit

Housing benefit is disregarded where the claimant is living in 'specified accommodation', which is defined as:[13]

• 'exempt accommodation' provided by a non-metropolitan county council in England, PRPSH, charity or voluntary organisation where that organisation or someone acting on their behalf provides the claimant with care, support or supervision

• supported accommodation that falls outside the definition of 'exempt accommodation' because the care, support or supervision is not provided by the landlord or on its behalf

• a refuge where the claimant is fleeing domestic violence

• a local authority hostel providing care and attention

Any housing benefit entitlement of a universal credit claimant is also disregarded.[14]

This includes housing benefit for universal credit claimants living in 'specified accommodation'.[15]

The benefit cap does not apply to a claimant in any of the following situations.[16]

Where the claimant has lost a job

There is a temporary exemption to the benefit cap for 39 weeks, known as the 'grace period'.

This exemption applies where the claimant or their partner has lost a job through no fault of their own and they had worked for at least 50 of the last 52 weeks before losing their job.

Time spent working abroad and periods covered by zero hours contracts (provided there was no claim for working-age benefits during that time) count in calculating the time in work.[17]

Where the claimant works enough hours to qualify for working tax credit

If the claimant or their partner works enough hours to qualify for working tax credits, the benefit unit will not be affected by the benefit cap even if they earn too much to receive a tax credit payment.

For details about the hours needed to qualify, see Gov.uk

When claiming universal credit and earning above a certain level

The benefit unit will not be affected by the benefit cap if the combined net monthly earnings of a universal credit claimant and their partner are above a certain level.

This level of earnings is:

• set at earnings the claimant would get for working 16 hours per week on the National Minimum Wage

• calculated after tax and National Insurance deductions

The calculation is:

National Minimum Wage x 16 hours per week x 52 weeks of the year ÷ 12 months of the year.

For example, applying the calculation using the National Minimum Wage as of 1 April 2023, when it is £10.42 per week:[18]

£10.42 x 16 x 52 ÷ 12 = £722.45

In this example the household would need to have monthly earnings of at least £722.45 to be exempt from the benefit cap.

Households receiving certain benefits

Claimants are not affected by the benefit cap if they, their partner or children under the age of 18 receive any of the following benefits:[19]

• armed forces compensation scheme

• armed forces independence payment

• attendance allowance

• carer's allowance or the carer element of universal credit

• disability living allowance or personal independence payment

• employment and support allowance (support component)

• universal credit (limited capability for work related activity element)

• guardian's allowance

• industrial injuries benefits (and equivalent pensions and payments under the Armed Forces Compensation Scheme)

• war widows and war widowers pension

The exemption from the benefit cap due to being in receipt of an exempting benefit does not extend to:

• the period of time while the decision on a claim is pending

• while waiting after an adverse decision is appealed

Lone parents with children below school age

The Supreme Court confirmed that it is not unlawfully discriminatory or in breach of the UN Convention on the Rights of the Child 1989 to apply the benefit cap to lone parents households with children below school age - while such households, particularly those with children under the age of two, are significantly affected by the cap, the government policy not to treat them differently to other households who are capped is not manifestly without reasonable foundation.[20]

Affected claimants should continue to request a discretionary housing payment to make up any rent shortfall caused by the imposition of the cap.

Claimants of pension credit age

Claimants over the qualifying age for pension credit are not subject to the benefit cap. The state pension calculator on Gov.uk can be used to calculate when a claimant will qualify for pension credit.

If a claimant is claiming as part of a couple and only one of the couple is over the qualifying age for pension credit, the benefit cap:

• does not apply if they are in receipt of housing benefit

• applies if they are in receipt of universal credit (and will continue to apply until both members of the couple are over the qualifying age for pension credit)[21]