The benefit cap
The benefit cap puts a limit on the total amount of welfare benefits many people can be paid. Find out how the benefit cap may affect you, and what action you can take if it does.
How much is the cap?
In Wales, from 7th November 2016, the total amount of benefits that can be received by any individual or family is capped at:
- £384.62 per week for single parents and couples with children (£20,000 per year)
- £257.69 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.
Before 7th November 2016, the total amount you could claim in benefits was:
- £500 per week for single parents and couples
- £350 per week for single people.
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.
Before 7 November 2016 Carer’s and Guardian’s Allowance were also taken into account, but these are now ignored.
Who is affected by the benefit cap?
The benefit cap only applies to people of working age. You will probably be affected by the cap if you are out of work and claiming benefits such as income support, jobseeker’s allowance or employment and support allowance.
The benefit cap will not apply if:
- you are of state 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)
- The support component of Employment and Support Allowance (ESA)
- Industrial injuries disablement benefit
- you receive war widows or war widowers pensions
- you or your partner are working, you claim Universal Credit (UC) and you are earning at least the amount you would get for 16 hours per week on national minimum wage, ie:
25 years and older £120 per week
21 to 24 years old £112 per week
18 to 20 years old £89 per week
- 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 their own. In this situation, there will be a 39 week ‘grace period’ when the cap won’t apply to your claim for benefits.
From the 7 November 2016, the benefit cap will also not apply if you (or your partner) receive Carer’s allowance or Guardian’s allowance or you are claiming Universal Credit and you (or your partner) receive the carer’s element.
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.
Action to take 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 seek advice 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.
The DWP has set up a bilingual helpline to answer questions about the benefit cap:
- If you receive Universal Credit:
- Tel : 0345 600 0723
- Tel (Welsh): 0345 600 3018
- Textphone: 0345 600 0743
- If you receive any other benefits:
- Tel: 0345 605 7064
- Tel (Welsh): 0345 605 7066
- Textphone: 0345 608 8551
For information from the Money Advice Service on changes to the benefit rules, click here.