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 when the new benefit cap amount is introduced)
Guardians Allowance (this income only applies from Autumn 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.
How can I find out if I'm going to be affected by the benefit cap?
The DWP has put together a benefit cap calculator you can use that can tell you if you will be affected or not. It's really easy to use and can be completed in five minutes.
What can I do?
Increase your payments - If you have the money available you can use it to cover the cost of any changes and stay in your current home. The best thing you can do is pay a little extra in order to get in advance on your rent account and build up some savings for other bills. Even small amounts will mount up over the weeks.
Take a lodger - You may be able to earn additional income from a lodger, but remember to check with us first to ensure your tenancy agreement allows it.
Find a job – If you want help in getting back into work, training, education or work experience you can contact our Opportunities Team. This team will look into what is available and what they can do to help you move back into the world of work.
Manage your money - If you have any cash concerns you can contact our Money Advice Team. They can provide you with FREE, confidential advice on how to manage your money and clear any debts you have.
To access any of the above services please contact us.