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The Benefit Cap
What is it?

The benefit cap is part of the Welfare Reform Bill that received Royal Assent on 8 March 2012. In August 2013, a cap was introduced on the total amount of benefit that working age people can receive.

The cap will restrict benefit to:

  • £500 per week for couples and lone parents
  • £350 p/wk for single adults

What benefits are included?

The benefits that will be taken into account when calculating the cap are:

  • Bereavement Allowance/ Widowed Parent’s/Mother’s Allowance
  • Carer’s Allowance
  • Child Benefit
  • Child Tax Credit
  • Employment and Support Allowance (ESA) (contribution-based and income-related) except where the Support Component has been awarded
  • Guardian’s Allowance
  • Housing Benefit
  • Incapacity Benefit
  • Income Support
  • Jobseeker’s Allowance (contribution-based and income-based)
  • Maternity Allowance
  • Severe Disablement Allowance (SDA)
  • Widow’s Pension

 The benefits and payments that will not be taken into account when calculating the benefit cap are:

  • Bereavement payment
  • Council Tax Benefit or the replacement localised support for Council Tax
  • Discretionary Housing Payments
  • Social Fund Payments – all one off payments:
  • Budgeting Loans
  • Cold Weather Payments
    Community Care Grants
  • Crisis Loans
  • Funeral Payments
  • Sure Start Maternity Grants
  • Pension Credit
  • Residency order payments
  • Statutory Adoption Pay – Paid by employers.
  • Statutory Maternity Pay – Paid by employers.
  • Statutory Paternity Pay – Paid by employers.
  • Statutory Sick Pay - Paid by employers.
  • Winter Fuel Payment.
  • You will be exempt from the benefit cap if you, your partner or any children you are responsible for receive the following benefits

The following households will be exempt from the cap:

Those entitled to:

  • Working Tax Credit (Will still qualify even if there is no entitlement if the appropriate number of hours are worked)

Those in receipt of:

  • Disability Living Allowance
  • Personal Independence Payment (from April 2013)
  • Attendance Allowance
  • The support component of ESA
  • Industrial Injuries Benefits (and equivalent war disablement pensions and payments under the Armed Forces Compensation Scheme)
  • War Widows and War Widowers pension
  • Claimants who have been in employment for 52 weeks or more when they claim benefit will be exempt from the cap for a “grace period” of up to 39 weeks.

How will this affect my benefit?

If you exceed the cap your housing benefit will go down to make sure that the total amount of benefit is not more than the benefit cap level. You will then be responsible for paying any shortfall in rent.