What is the benefit cap?
The ‘benefit cap’ limits the total amount of benefits a household can receive to:
- £22,020 per year / £1,835.00 per month / £423.46 per week if you are a couple or single and have children who live with you
- £14,752.92 per year / £1,229.42 per month / £283.71 per week if you are single without children
Your benefits will be capped if you receive Universal Credit (UC) or working-age Housing Benefit (HB) – see details below.
Your benefits are NOT capped if:
- you are not getting UC or working age HB
- you or your partner are working and get working tax credit (WTC), including if you have a nil WTC award because of your income
- you receive UC, you or your partner work and your combined earnings are at least £722 in your monthly assessment period
- you, your partner or children are receiving any of these disability or carer benefits:
– Attendance allowance
– Disability living allowance (DLA)
– Personal independence payment (PIP)
– Employment support allowance (ESA) paid with the support component
– UC that includes the limited capability for work-related activity element Industrial injuries benefits
– Guardian’s allowance
– War widow or widower’s pension
– Industrial injuries disablement benefit, reduced earnings allowance or retirement allowance
– Carer’s allowance, or UC that includes the carer element
The ‘grace period’
There is no benefit cap for a ‘grace period’ of 9 months for UC or 39 weeks for HB if you have been working for the previous 12 months.
Universal Credit
For UC, the grace period applies if:
- your earnings (or combined earnings if you have a partner) from work are now less than £722 a month (ie, adult national minimum wage for 16 hours a week converted to a monthly amount), but they had been at least £722 a month in each of the preceding 12 months (or £658 for any months in 2022/23)
- you have stopped work and your earnings (or combined earnings if you have a partner) had been at least £722 a month in each of the preceding 12 months (or £658 for any months in 2022/23).
Housing Benefit
For HB, the grace period applies if:
- you or your partner were previously in work for at least 50 out of the 52 weeks before your last day of work and in those 50 weeks, you were not entitled to Income Support (IS), Job Seekers Allowance (JSA) or Employment and Support Allowance (ESA).
Note: You count as still in work while on maternity, adoption, paternity, shared parental or parental bereavement leave or while receiving Statutory Sick Pay (SSP).
What benefits are included in the cap?
Universal Credit
If you get UC, the following benefits are taken into account for the benefit cap:
- UC
- JSA
- ESA (if neither you or your partner are in the Support Group)
- Child Benefit
- Maternity Allowance
- Widowed parent’s allowance
- Widow’s pension
Housing Benefit
If you get HB, the following benefits are taken into account for the benefit cap:
- HB (except for ‘specified accommodation’)
- IS
- Incapacity benefit
- Severe Disablement Allowance
- JSA
- ESA (if neither you or your partner are in the Support Group)
- Child Benefit
- Maternity Allowance
- Widowed parent’s allowance
- Widow’s pension
- Child Tax Credits
How the cap is applied
Universal Credit
If the cap is applied through your UC, your UC is reduced by the amount by which the total amount of benefits you receive exceeds the cap.
Housing Benefit
If the cap is applied through your HB, the council reduces your HB by the amount by which the total amount of benefits you receive exceeds the cap. You must be left with at least 50 pence per week HB (so you can access discretionary housing payments).
We can help
For help with any queries please contact Matt O’Brien on 01603 750208 or matthew.obrien@broadlandgroup.org