What is the benefit cap?
This is a limit on how much a non-working or low earning household can receive in certain benefits.
In the benefits system, a household is defined as an adult, their partner (if they have one) and any dependent children. Other relatives living in the same home such as adult children, brothers or sisters would not be considered to be part of the ‘household’ referred to for the purpose of the benefit cap, even if they live in the same home.
The benefit cap applies to ”working-age households”, and can reduce the amount of Housing Benefit or Universal Credit you are awarded towards any eligible housing costs. This means if you are affected by the cap, you will need to make up any rent/housing cost shortfall from the benefits you receive. If you are not getting Housing Benefit or Universal Credit, the cap won’t apply to you.
The amounts vary depending on whether you live in London or not as well as some other factors (see below):
- £384.62 a week if you are a couple or have children who live with you outside London (£20,000 per year)
- £442.31 a week if you are a couple or have children who live with you in London (£23,000 per year)
- £257.69 a week if you are a single adult without children and live outside London (£13,400 per year)
- £296.35 a week if you are a single person without children and live in London (£15,410 per year)
The GOV.UK site has a benefit cap calculator that could help you find out how much your benefit could be capped.
You will be exempt from the cap if you’re receiving:
- Carer’s Allowance
- the underlying entitlement to Carer’s Allowance
- or a Carer Element within Universal Credit.
If anyone in your ‘benefit household’ (you, your partner or any dependent children) are receiving any of the following, the benefit cap will not apply to you:
- Working Tax Credit (WTC) (even a nil award, so it is important to renew your award each year even if no WTC can be paid)
- The support component of Employment and Support Allowance
- The limited capability for work and work-related activity element of Universal Credit
- Disability Living Allowance (DLA) or Personal Independence Payment (PIP)
- Attendance Allowance
- Industrial Injuries Benefit (and equivalent payments under the War
Disablement Pension or Armed Forces Compensation Scheme)
- War widow’s or widower’s pension
- Guardian's Allowance (in England, Wales and Scotland – this has only been the case since 7th November 2016)
- You receive Housing Benefit and live in what is called “exempt accommodation”. This is typically accommodation where substantial care and support is provided, such as temporary local authority accommodation or a refuge place.
You can be exempt for a “grace period” of 39 weeks if you or your partner were in work and earning over a certain amount (both employed and self-employed) for at least 50 weeks out of the last 52 weeks before the last day of work, and you or your partner were not getting Jobseeker’s Allowance, Income Support or Employment and Support Allowance.