Benefit cap

The Benefit Cap places a limit on the amount of benefit that people aged 16 to 64 can receive. The intention is that people should not receive more in benefit payments than the average wage paid to people in work.

The Benefit cap will apply to the combined income from the main out-of-work benefits, plus child benefit and child tax credits.

For a 12 week period starting from 7th November 2016, the Government started to apply a further reduction in benefits which will affect those already affected by the cap, as well as some customers for the first time.

Couples and lone parents will have their Benefit Cap reduced from £500 per week to £384 per week and single adults from £350 per week to £257 per week.

There are also new exclusions from the Benefit Cap:

• Customers in receipt of Guardians Allowance
• Customers being paid Carers Allowance
• Customers with a Carer Element included in their Universal Credit

The following benefits count towards the benefit cap:

• Income Support
• Jobseeker’s Allowance
• Employment and Support Allowance (except where it includes the support component)
• Bereavement Allowance
• Child Benefit
• Child Tax Credit
• Housing Benefit
• Incapacity Benefit
• Maternity Allowance
• Severe Disablement Allowance
• Widowed Parent’s Allowance
• Widowed Mother’s Allowance
• Widow’s Pension, including the age related component
• Universal Credit

Exemptions

The Benefit Cap will not apply to you, if you or your partner gets Working Tax Credit, if you are on Universal Credit earning £430 or more a month or you, your partner or anyone in your household who you are responsible for gets:

• Disability Living Allowance
• Personal Independence Payment
• Attendance Allowance
• The support component of Employment and Support Allowance
• Industrial Injuries Benefits
• War Widows and War Widowers pension, War Disablement Pension

Carers Allowance and Guardian’s Allowance currently count towards the Benefit cap. Once the new changes take effect, if you, your partner or any children living with you get carers allowance or Guardian’s Allowance, the benefit cap will not apply to you.

The cap does not apply for 39 weeks if you have worked continuously for at least 12 months before work ended. The 39 weeks starts from the date the work ended.

To find out if the changes to the benefit cap will affect you, click here to use the benefit cap calculator

Here are some points to consider in preparation for the change:

• Get advice about how you could reduce your bills– contact our Rents Team on 0800 035 2211 or 0300 303 8324 from a mobile.
• Think about whether you can reduce any of your outgoings – do a budget plan visit www.moneyadviceservice.org.uk to use their budget planner
• Talk to someone about a move into work or increasing your hours. You will not be affected if you work enough hours to get Working Tax Credit or you are on Universal Credit and earning £430+ a month
• If your benefit is cut and you cannot afford to pay the shortfall of rent, you can apply for Discretionary Housing Payment via your local council which may be able to help you for a short period of time whilst you seek further advice. Contact the Rents Team on 0300 561 1111 for a Discretionary Housing Payment form or to request assistance completing the application.

Our Rents team is also available to give further information and advice. Contact them on 0300 561 1111 (this is included in any inclusive calls made from a mobile and low cost for all landlines).