The Benefit Cap

Overview

The Benefit cap was rolled out nationally between 15 July and the end of September 2013 following an introduction in April of the same year amongst four London boroughs. The purpose of the cap is to ensure that households (working age claimants) in receipt of out of work benefits no longer receive more in benefits than the average weekly wage after tax and national insurance.

How much is the cap?

The Benefit cap is currently set at:

  • £442.31 per week (£1,916.67 per month or £23,000 per year) for couples and lone parents in Greater London
  • £384.62 per week (£ 1,666,67 per month or £20,000 per year) for couples and lone parents outside Greater London
  • £296.35 per week (£1,284.17 per month or £15,410 per year) for single adults in Greater London
  • £257.69 per week (£1,116.67 per month or £13,400 per year) for single adults outside Greater London

If the total amount of your benefit exceeds the cap level your Housing Benefit will be reduced. This is to make sure that the total amount of your benefit is not more than the Benefit cap level.

When you are not affected

You are not affected by the cap if you or your partner:

  • get Working Tax Credit (even if the amount you get is £0)
  • are over State Pension age
  • get Universal Credit because of a disability or health condition that stops you from working (this is called ‘limited capability for work and work-related activity’)
  • get Universal Credit because you care for someone with a disability
  • get Universal Credit and you and your partner earn more than £569 a month combined, after tax and National Insurance contributions

You are also not affected by the cap if you, your partner or any children under 18 living with you gets:

  • Armed Forces Compensation Scheme
  • Armed Forces Independence Payment
  • Attendance Allowance
  • Carer’s Allowance
  • Disability Living Allowance (DLA)
  • Employment and Support Allowance (if you get the support component)
  • Guardian’s Allowance
  • Industrial Injuries Benefits (and equivalent payments as part of a War Disablement Pension or the Armed Forces Compensation Scheme)
  • Personal Independence Payment (PIP)
  • War pensions
  • War Widow’s or War Widower’s Pension
  • are over State Pension age

In addition if you or your partner have been in employment for 50 out of the previous 52 weeks prior to claiming benefit you may be exempt from the cap for a grace period of up to 39 weeks.

Adult children

Adult children living in your household, and receiving a benefit in their own right, are not normally counted as part of your household for the purposes of the Benefit cap.

Benefits that count towards the cap

The Department for Work and Pensions (DWP) adds together the amount you have been awarded from the list of the following benefits:

  • Bereavement Allowance
  • Carers Allowance
  • Child Benefit
  • Child Tax Credit
  • Employment and Support Allowance (except where it is paid with the support component)
  • Guardian’s Allowance
  • Housing Benefit whether paid direct to you or to your landlord (but not including Housing Benefit paid for Supported Exempt Accommodation*)
  • Incapacity Benefit
  • Income Support
  • Jobseeker’s Allowance
  • Maternity Allowance
  • Severe Disablement Allowance
  • Widowed Parent’s Allowance
  • Widowed Mother’s Allowance
  • Widow’s Pension, including the Age-Related component

*Supported Exempt Accommodation is either a resettlement place or accommodation provided by a county council, housing association, registered charity or voluntary organisation that provides you with care, support or supervision. This accommodation can include supported housing such as group homes, hostels, refuges, sheltered housing, supported living complexes and adapted housing for the disabled.

Further help

Further information and an online calculator are available giving you an estimate of how much lower your benefit might be if you get more than the benefit cap levels. A helpline is also available for you to call. The number is 0845 605 7064 or textphone 0845 608 8551 for people with hearing or speech impairments. The helpline is open Monday to Friday 8am to 6pm.

Discretionary Housing payment

If you are affected by the Benefit cap and are now struggling to pay your rent because the cap has reduced your Housing Benefit or the Housing element of your Universal Credit, you should consider applying to your local authority for a Discretionary Housing Payment to help with the shortfall. See our Discretionary Housing Payment information page.

Working hours

You may want to increase your work hours so that you are exempt from the cap. Finding work could also mean that the cap wouldn’t apply to you as qualifying for Working Tax Credit will mean these rules do not apply. If you are not already seeing a Jobcentre Plus adviser, or a Work Programme or Work Choice provider, you can get support from Jobcentre Plus to help you with the skills you may need to find a job. To arrange this you will need to ring Jobcentre Plus on 0845 604 3719

Disabilities

If you are eligible for a disability benefit that you are not claiming, you may want to claim it to become exempt from the cap. Check out Turn2us benefit calculator. Alternatively visit your nearest local advice centre.

Moving home

You may also consider moving into cheaper accommodation or negotiate a rent reduction to one which is more affordable. This could mean that the cap will not apply to you or that the amount you have to pay from your other benefits to make up the rent shortfall is much less.