Benefit Cap - What you need to know
What is the benefit cap?
As part of the Government's Welfare Reform changes, the total amount of benefit that can be received will be a set amount for both single people and couples. This is called the benefit cap.
The benefit cap was brought in to make sure that no family received more in benefits than the average working household.
The cap is currently £500 per week for couples and lone parents and £350 per week for single adults. From autumn 2016 (October/November) the cap amount will drop even further to:-
£384.62 a week if you are a couple or have children
£257.69 a week if you are a single person
Which benefits are included in the benefit cap?
Employment Support Allowance
Child Tax Credit
Widowed Parents Allowance
Severe Disablement Allowance (SDA)
Which benefits are not included in the benefit cap?
If you or a member of your household are receiving one of the benefits below then the benefit cap will not apply to you:
Working Tax Credits
Disability Living Allowance / PIP
War Widows / widowers benefits
Armed Forces compensation scheme payments
Industrial Injuries Benefits
Carers Allowance (this income only applies from Autumn 2016 when the new benefit cap amount is introduced)
Guardians Allowance (this income only applies from Autumn 2016 when the new benefit cap amount is introduced)
Which benefits will be reduced if I am affected by the benefit cap?
If you receive Housing Benefit this will be reduced by the amount you are over the cap. If your Housing Benefit entitlement is reduced due to the cap amount, you will receive at least 50p of your Housing Benefit entitlement.
For example, a couple receives £585 in benefits and their Housing Benefit entitlement is £100. The benefit cap is currently £500 for couples. This means they are £85 over their entitlement and their housing benefit entitlement will be reduced to £15 per week.
From Autumn 2016 the cap will reduce even further for this couple to £384.62. That will mean they are now £200.38 over the cap and their Housing Benefit entitlement will reduce to 50p.
If you receive Universal Credit your entitlement will be reduced by the amount that you are over the cap.
If you would like confidential advice or more information from our Work and Money Advisors, please contact either Beverley Hiden or Philippa Sandt on 01386 420800
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