The benefit cap limits the amount of benefit that any household can receive in any given year, ie:
- £20,000 per year / £384.62 per week if you are a couple or have children
- £13,400.00 per year / £257.69 a week if you are a single person
The cap applies to working age claimants who are not working enough hours to qualify for working tax credits. In a household with children, this means that the cap does not apply provided one person is working at least 16 hours per week.
For people who have recently left work, a 39 week grace period will be granted before the benefit cap is applied to their benefits, provided they were previously working for at least 12 months.
What benefits are included in the cap?
The cap covers most working age benefits including the following:
- Housing benefit
- Child benefit and child tax credit
- Jobseeker’s allowance
- Employment support allowance (except if paid with the support element)
- Income support
- Contributory benefits relating to bereavement and maternity
Note: where the total amount of these combined benefits exceeds the cap amount, the claimant’s housing benefit will be reduced.
Who does the cap not apply to?
The benefit cap will not apply to any person receiving:
- Attendance allowance
- Disability living allowance (DLA)
- Personal independence payment (PIP)
- Employment support allowance (ESA) paid with the support element
- Industrial injuries benefits
- Guardian’s allowance
- War widows or widower’s pension
- Carer’s allowance
Note – tenants who live in supported housing are not exempt from the cap but their housing benefit is discounted from the calculation if their home qualifies as ‘specified accommodation’.
What if I am receiving Universal Credit?
Where households have already started to receive Universal Credit (UC) the cap operates in the same way except any element of the UC can be reduced if it would otherwise exceed the cap.
The main difference relates to work. Instead of needing to work a minimum of 16 hours per week to escape the cap, if you claim Universal Credit you will need to earn at least £100 per week.