Welfare Advice The Benefit Cap

The government has announced changes to the Benefit Cap and the changes will take place on a rolling programme from 7 November 2016. The cap is reducing and will be different depending on where you live in the UK.

What is the Benefit Cap?

The benefit cap is a limit on the total amount of income from certain benefits a household can receive when aged between 16 and 64. How much you get for certain benefits may go down to make sure the total you get isn’t more than the cap amount.

Currently the cap is:

•£500 per week (£26,000 per year) if you’re in a couple, whether your children live with you or not

•£500 per week (£26,000 per year) if you’re single and your children live with you

•£350 per week (£18,200 per year) if you’re single and you don’t have children, or your children don’t live with you

What will the new Benefit Cap be?

If you live outside a Greater London borough, the cap will be:

•£384.62 per week (£20,000 a year) if you’re in a couple, whether your children live with you or not

•£384.62 per week (£20,000 a year) if you’re single and your children live with you

•£257.69 per week (£13,400 a year) if you’re single and you don’t have children, or your children don’t live with you

If you live in a Greater London borough, the cap will be:

•£442.31 per week (£23,000 a year) if you’re in a couple, whether your children live with you or not

•£442.31 per week (£23,000 a year) if you’re single and your children live with you

•£296.35 per week (£15,410 a year) if you’re single and you don’t have children, or your children don’t live with you.

Am I affected?

The cap applies to all benefit claimants who are working-age and receiving Housing Benefit or the Universal Credit Housing Costs element, unless they:

•Are working enough hours to qualify for Working Tax Credit, or

•Are claiming Universal Credit and earn at least £430 per month, or

•Have someone in their household who is receiving a disability benefit, or

•Their partner is over Pension Credit age

When you are subject to the Benefit Cap, your Housing Benefit or Universal Credit award is reduced to bring your total benefits in line with the cap amount.

You’re not affected by the cap if anyone in your household gets any of the following benefits:

•Armed Forces Compensation Scheme

•Armed Forces Independence Payment

•Attendance Allowance

•Disability Living Allowance (DLA)

•Employment and Support Allowance (if you get the support component)

•Industrial Injuries Benefits (and equivalent payments as part of a War Disablement Pension or the Armed Forces Compensation Scheme)

•Personal Independence Payment (PIP)

•Universal Credit payment for ‘limited capability for work and work-related activity’

•War pensions

•War Widow’s or War Widower’s Pension

More information on the Benefit Cap can be found at https://www.gov.uk/benefit-cap/overview

You will find a benefit cap calculator there which you can use to see if you are affected.

Jacqueline Lange Digby Brown Solicitors