The benefit cap
The benefit cap puts a limit on the total amount of benefits many working age people can be paid.
How much is the cap?
The total amount of benefits that can be received by any individual or family living in Wales is capped at:
- £423.46 per week for single parents and couples with children (£20,000 per year)
- £283.71 per week for single people (£13,400 per year).
If the total amount of benefits you receive is more than these limits, the benefit cap will apply and your Housing Benefit or Universal Credit will be reduced to bring your total benefits down to these limits.
What benefits are included in the cap?
When calculating how much benefit you receive, the total amount you, your partner and any children living with you receive from the following benefits will be added together:
- Housing Benefit (unless you live in supported housing)
- Income Support (IS)
- Jobseeker’s Allowance (JSA)
- Employment and Support Allowance (ESA) (unless you are in the support group)
- Child Benefit
- Child Tax Credits
- Maternity Allowance
- Widows Parent’s Allowance
- Severe Disablement Allowance
- Bereavement Allowance
- Incapacity Benefit
- Universal Credit (except in certain circumstances).
One-off benefit payments, such as budgeting loans, are not taken into account.
Who is affected by the benefit cap?
The benefit cap only applies to people of working age.
The benefit cap will not apply if:
- you or your partner are of pension age
- you or your partner are working and receive Working Tax Credit (or work enough hours to claim them)
- you or your partner receive certain disability benefits:
- Disability living allowance (DLA)
- Personal independence payment (PIP)
- Attendance allowance (AA)
- Employment and Support Allowance (ESA) – support component
- Universal credit (UC) – carer element or limited capability for work-related activity element
- Carer’s allowance or Guardian’s allowance
- you receive War Widow’s or War Widower’s pensions
- you or your partner receive Industrial Injuries Benefits (and equivalent payments as part of a War Disablement Pension or the Armed Forces Compensation Scheme)
- you or your partner receive any payment from the Armed Forces Compensation Scheme or an Armed Forces Independence Payment
- you or your partner are working, you claim Universal Credit (UC) and you are earning at least £722 a month after tax and National Insurance contributions.
If you or your partner have been in work continuously (either employed or self-employed) for 12 months and lose your job through no fault of your own there will be a 9 month ‘grace period’ when the benefit cap won’t apply. The ‘grace-period’ will only apply if:
- you’re now earning less than £722 a month
- 12 months before you stopped working or your earnings went down, you earned the same as or more than the earnings threshold (this was £658 up to 10 April 2023 and is £722 from 12 April 2023 ).
How much will the reduction of benefit be?
You can use Gov.uk’s online benefit cap calculator to get an estimate of how much your benefit might be reduced.
What can you do if you are affected by the benefit cap?
The total amount of benefit you receive, including Housing Benefit and Universal Credit, may reduce as a result of the benefit cap. This will happen automatically.
If your income is reduced because of the benefit cap and you don’t have enough money to pay all your rent, you could fall into arrears and risk losing your home.
Paying the rent should always be your top priority. Use our online budget planner to help work out if you can reduce other costs and always try and meet your rent payments. Your local council may be able to help you with your rent by giving you a discretionary housing payment if you are facing exceptional hardship. This is usually for a short time only.
If you think that you cannot afford to pay your rent and you are starting to get into arrears then get help straight away. Do not ignore things because you could be evicted.
You may decide that you have no option but to move to a cheaper home. Contact your council’s housing options or homelessness service for help and advice if you think that you can on longer afford to live in your home.