Benefit Cap

The ‘benefit cap’ is a limit that will be put on the total amount of benefit that working age people can receive. The government is rolling out the cap across all London boroughs now. You may be affected.

Please click this link for an update on the Benefit Cap.

The maximum benefit that people will be allowed to receive will be:

  • £500 per week for lone parents or couples
  • £350 per week for single people without children

The Government will add up how much money you get from a range of benefits and if the total comes to more than the maximum amount allowed, your housing benefit payments will be reduced.

The benefits that will be added up include:

  • housing benefit
  • jobseeker’s allowance
  • employment support allowance
  • income support
  • child tax credit and benefit
  • carer’s allowance
  • Incapacity benefit

People will not be affected if:

  • they get Working Tax Credit
  • a member of the household is claiming Disability Living Allowance (or Personal Independence Payment) or the support element of Employment Support Allowance
  • they receive War widows and widowers benefit

Households who are working enough hours to qualify for Working Tax Credit will be exempt from the cap. This is…

  • 16 hours for lone parents
  • 24 hours for couples
  • 30 hours for single individuals over 25 years old.

Households who are entitled to Working Tax Credit will be exempt even if they don’t claim it.

benfitcap2

Example

Lone parent with 5 children

5children
Weekly benefits:
income support: £339.45
child benefit: £73.90
housing benefit: £108.70
Total: £522.05

The £500 benefit cap would apply to this customer as the total received is over the £500 cap by £22.05 therefore the housing benefit will reduce by £22.05.

The new housing benefit award will be £86.65 (£108.70 – £22.05). The customer will need to make up the £22.05 shortfall from their other income.

Things you can do

  • Check if you are affected
  • If you are not sure whether or not you will be affected by the benefit cap, you can use an online benefit calculator. Visit gov.uk/benefits-adviser
  • Increase your working hours or seek employment
  • If you are a lone parent and work 16 hours or more or if you are a couple and one of you works 24 hours or more or if you are single and work 30 hours or more you are exempt from the benefit cap.
  • Speak to us
    Call 020 7091 1800 and speak to your Housing Officer if you are worried. If the cap does apply to you, you should receive a letter from the Department of Work and Pensions (DWP). Check the details and if you think a mistake has been made contact the DWP directly on 0845 605 7064.
  • Look into moving options
  • Look for cheaper accommodation where you can afford to pay the rent either by looking at Mutual Exchange or transfer through your Local Authority or by using homeswapper.co.uk and housingmoves.org.
  • Manage your money and budget
  • Find out about maximising your income and how to make your money go further with Step Change. Visit stepchange.org