Skip Navigation LinksBenefit-Cap

Benefit Cap

​​​​​The government introduced rules in 2013 which limit the overall amount of welfare benefits a ‘working age’ household can receive.  It does not affect you if:
  • you or your partner (and in some circumstances a dependent child) are getting certain benefits, or 
  • you (or your partner) are Pension Credit age – unless you are getting Universal Credit, Income Based JSA or Income Support or Income Related ESA.

The Benefit Cap limit is being lowered, which means that if you were already affected by the Benefit Cap you may have lost more of your benefits or, if you have not already been affected, you may be when the new lower limit is introduced where you live, or if you make a new claim for benefits.

On the 7 November 2016 the next phase of the Government’s Benefit Cap was extended to the amount of benefits a single person or family can receive.  

Under the old limit, the Benefit Cap mainly affected large families (4 or more children) those with high rents, and sometimes those temporarily receiving Housing Benefit (or Universal Credit) on two homes.  As the Cap is reduced further more people will be affected (families with 3 or more children and families with 2 children in areas with higher rents e.g. London).  

This now affects people who live, and claim benefits, in Warrington and will affect working age people (aged 16 and 64).  

The cap is:
  • £384.62 per week (£20,000 a year) for a family or couple.
  • £384.62 per week (£20,000 a year) for a single person with children living with them.
  • £257.69 per week (£13,400 a year) for a single person.

Housing Benefit will be reduced to keep your benefits below the Cap limit.

The cap applies to the total amount of people in a household, including  partners and any children, who get certain benefits including:
  • Bereavement Allowance
  • Child Benefit
  • Child Tax Credit
  • Employment and Support
  • Allowance (unless you get the ‘support’ component)
  • Housing Benefit
  • Incapacity Benefit
  • Income Support
  • Jobseeker’s Allowance
  • Maternity Allowance
  • Severe Disablement Allowance
  • Widowed Parent’s Allowance
  • Universal Credit (unless you aren’t deemed fit for work)

Some benefits DO NOT count towards the cap.  The cap won’t apply to you if you, your partner or any children you are responsible for are in receipt of any of the following:
  • Armed Forces Compensation Scheme
  • Armed Forces Independence Payment
  • Attendance Allowance
  • Carer’s Allowance
  • Disability Living Allowance
  • Employment and Support Allowance (support component)
  • Guardian’s Allowance*
  • Industrial Injuries Benefit
  • Personal Independence Payment
  • War Widow’s or War Widower’s Pension

If you think you may be affected by the Benefit Cap, it’s important that you contact us as soon as possible, so we can help you.  You can phone 01925 452452, email ucsupport@gght.org.uk.  
  
Accordion Description
  
​​The Benefit Cap does not apply to you if:
  • You or your partner are Pension Credit Age.
  • You or your partner have claimed and are entitled to claim, Working Tax Credit.
  • You, your partner, or a child or young person for whom you get Child Benefit, gets Disability Living Allowance, Personal Independence Payment or Armed Forces Independent Payment.
  • You or your partner are in the ‘support group’ of Employment Support Allowance.
  • You or your partner receive (or have an underlying entitlement to) Carer's Allowance,
  • You or your partner receive Guardian's Allowance.
  • You or your partner get Industrial Injuries Disablement Benefit.
  • You or your partner get a War Disablement Pension, Armed Forces Compensation Scheme payment, or a War Widows’/Widowers’ Pension.
  • You (or you and your partner) are out of work but had been in work for at least 50 out of the 52 weeks before – this "grace period" lasts 9 months.
  
If you are of working age and not getting one of the benefits / in one of the situations that would exclude you from the Benefit Cap then the DWP will add together most of the benefits you are entitled to (including Child Benefit):

They will then compare this to the Benefit Cap limit that applies to you - this will depend on whether the lower limit has been rolled out to your area yet or not. If not, your total welfare will be compared to:
  • £500 per week for single parents.
  • £500 per week for couples with or without children.
  • £350 per week for single people without children.
If your total welfare is above this Cap limit you will be affected by the Benefit Cap.

But, if you live in an area where the lower Cap level has been introduced, (ie. some time between November 2016 and January 2017) then your total welfare will be compared to:
Inside Greater London 
  • £442.31 per week for single parents.
  • £442.31 per week for couples with or without children.
  • £296.35 per week for single people without children.
Outside Greater London 
  • £384.62 per week for single parents.
  • £384.62 per week for couples with or without children.
  • £257.69 per week for single people without children.
If your total welfare is above this Cap limit you will be affected by the Benefit Cap.

When you add the benefits together do not include: Council Tax Support, Bereavement Support Payment, Statutory Sick Pay, Statutory Maternity Pay, Discretionary Housing Payments and Housing Benefit paid on ‘specified accommodation’ (ie certain supported housing – ask us if you’re not sure if this applies to you).

If the total amount of the benefits you (and your partner) are entitled to comes to more than the maximum amount allowed your Housing Benefit payments will be reduced. If this would mean losing all your Housing Benefit, you still have to be given 50p a week. This means that you can still try for a Discretionary Housing Payment.

It is only your Housing Benefit that can be reduced due to the Cap – although 50p a week must be left in payment. But if you receive Universal Credit then the whole of your Universal Credit award can be reduced due to the cap. 

Examples (outsite the Greater London area):

1. Julie and Nick have three children age 11, 8 and 4. Nick is currently unable to work following a car accident that has left him with back and leg injuries. They pay £100 per week rent for their 3 bedroom house.

They are claiming the following benefits:
Child Benefit   £48.10 per week
Child Tax Credit   £170.87 per week
Income Related ESA  £143.90 per week 
Housing Benefit   £100 per week
Total “welfare” £462.87 per week.

Under the old Benefit Cap level of £500 per week they were not affected, but the lower Benefit Cap of £384.62 per week has now been introduced in their area. 

Their ‘excess’ income is £78.25 (£462.87 minus £384.62 = £78.25). So their Housing Benefit will be reduced by £78.25 – they will receive £21.75 per week. They will have to pay the remainder of their rent out of their other benefits.

Nick could try for Personal Independence Payment. If he is awarded, not only will he receive extra income as PIP is paid on top of other benefits, but also their Housing Benefit will not be capped.

If Nick is so incapacitated that he should really be in the “support” group of ESA, he ought to could contact the DWP. Then if he is awarded the support component they would be entitled to an extra £29.75 a week ESA AND be excluded from the Benefit Cap - so they would keep all their Housing Benefit. However, it would be a good idea for him to seek specialist advice on this before he contacts the DWP, because asking to be assessed for the support group means a whole new assessment and there could be a chance that the DWP decide he is fit for work and not entitled to any ESA at all!

2. Alison lives in Warrington. She is a single parent with three children age 15, 13 and 10. She is looking for work and is claiming Jobseeker’s Allowance. She pays £110 per week rent for their 3 bedroom house. 

Alison is claiming the following benefits: 
Child Benefit £48.10 per week
Child Tax Credit £170.87 per week
Income Based JSA £73.10 per week 
Housing Benefit £110 per week
Total “welfare” £402.07 per week.

The Benefit Cap limit which applies to Alison is £384.62 per week.

Her ‘excess’ income is £17.45 (£402.07 minus £384.62 = £17.45). 

So her Housing Benefit will be reduced by £17.45 – she will receive £92.55 per week. She will have to pay the remainder of the rent out of her other benefits.

Get more information about the cap on benefits by calling the Government’s Benefit Cap information line on 0845 605 7064 or vist the Government’s Benefit Cap calculator​.
  

​​The Benefit Cap does not apply to you:

  • If you, your partner, or a child or young person for whom you get Child Benefit, gets Disability Living Allowance, Personal Independence Payment or Armed Forces Independent Payment.
  • If you or your partner are regarded as “having a limited capacity for work-related activity”.
  • If you or your partner get Industrial Injuries Disablement Benefit.
  • If you or your partner get a War Disablement Pension, Armed Forces Compensation Scheme payment, or a War Widows’/Widowers’ Pension.
  • If you are entitled to Carer’s Allowance or a Carer Element in your Universal Credit award
  • If you get Guardian’s Allowance
  • If you (or you and your partner) are out of work but had been in work continuously for over 12 months before losing the job and you or your partner (or if you were both working, between the two of you) have earned at least £430 net or more in each of these monthly assessment periods which started before 1 April 2017 or had earned income of £520 or more in any monthly assessment periods which started on or after 1 April 2017 onwards – you will be protected for a “grace period” of 9 months. 
  
If you are of working age and not getting one of the benefits / in one of the situations that would exclude you from the Benefit Cap then the DWP will add together most of the benefits you are entitled to (including Child Benefit):

They will then compare this to the Benefit Cap limit that applies to you - this will depend on whether the lower limit has been rolled out to your area yet or not. If not, your total welfare will be compared to:
  • £2167 per month for single parents.
  • £2167 per month for couples with or without children.
  • £1517 per month for single people without children.
If your total welfare is above this Cap limit you will be affected by the Benefit Cap.

But, if you live in an area where the lower Cap level has been introduced, (ie. some time between November 2016 and January 2017) then your total welfare will be compared to:

Inside Greater London 
  • £1916.67 per month for single parents.
  • £1916.67 per month for couples with or without children.
  • £1284.17 per month for single people without children.
Outside Greater London 
  • £1666.67 per month for single parents.
  • £1666.67 per month for couples with or without children.
  • £1116.67 per month for single people without children.
If your total welfare is above this Cap limit you will be affected by the Benefit Cap.

When you add the benefits together do not include: any Child Care Cost Element of the Universal Credit award, Council Tax Support, Statutory Sick Pay, Statutory Maternity Pay, Bereavement Support Payment,  Discretionary Housing Payments and Housing Benefit paid on ‘specified accommodation’ (i.e. certain supported housing – ask us of you’re not sure if this applies to you).

If the total amount of the benefits – including any Universal Credit - you (and your partner) are entitled to is more than the Benefit Cap limit that applies in any monthly assessment period then your Universal Credit payments will be reduced for that month. If you are struggling to pay your rent because of the Cap then you might be able to get a Discretionary Housing Payment to help you. Contact us for advice.

Example 1:
Mahia and Para have 6 children aged 17, 14, 10, 7 and twins aged 3. They have had difficulty finding work, and their rent is £128.00 per week (which works out at £554.67 per month). They live in Warrington.

They are entitled to:
Child Benefit   £  386.53 per month
Universal Credit £2488.99 per month
Total “welfare” £2875.52 per month.

As their total welfare income is £1208.85 over their Benefit Cap of £1666.67 per month, their Universal Credit will be reduced by £1208.85 to £1280.14, so they will need to pay for their rent, food, bills etc. out of their reduced Universal Credit and their Child Benefit. 

Example 2: 
Shaun lives in Warrington. He is a single parent with three children age 11, 9 and 7. He is looking for work. His rent is £110 per week rent for their 3 bedroom house. 

Shaun is entitled to: 
Child Benefit £208.43 per month
Universal Credit £1534.91 per month
Total “welfare” £1743.34 per month.

The Benefit Cap limit which applies to Shaun is £1666.67 per month.

His ‘excess’ income is £76.67 (£1743.34 minus £1666.67 = £76.67). 
So his Universal Credit will be reduced by £76.67 – he will receive £1458.24 per month. 

Get more information about the cap on benefits by calling the Government’s Benefit Cap information line on 0845 605 7064 or vist the Government’s Benefit Cap calculator​.
  
1. See if you, your partner or a dependent child might be entitled to one of the benefits that exempts you from the Cap (see the final FAQ if you are getting Universal Credit).​

For instance:
  • If a dependent child has an illness or disability find out about Disability Living Allowance.
  • If you or your partner have an illness or disability, find out if you could qualify for Personal Independence Payment.
  • If you or your partner have ever had an accident at work ask about Industrial Injuries Disablement Benefit. 
  • If you or your partner are currently on Employment and Support Allowance in the work-related activity group, it might be worth speaking to an adviser to see if you/they should be in the support group instead?
  • If you are getting Universal Credit, and either you or your partner have been assessed as having a "limited capacity for work", , it might be worth speaking to an adviser to see if you/they should be assessed as having a "limited capacity for work-related activity"? ​​
    If you or your partner are spending 35 hours or more caring for someone (this could be someone who does not live in your household) check if you could be entitled to Carer’s Allowance. If they already get the middle or high rate of the care component of Disability Living Allowance, the daily living component of Personal Independence Payment, Attendance Allowance or Armed Forces Independence Payment you may qualify for Carer’s Allowance. Or if they do not get a disability benefit, they could seek advice on whether they might be eligible. Before you make a claim for Carer's Allowance, you should get advice on whether your claim could affect the disabled person’s benefits. 
    If you are entitled to Child Benefit for a child of whom you are not the parent or adoptive parent, and the child’s parents or adoptive parents have died or their whereabouts is not known you may be entitled to Guardian’s Allowance. 

2. Contact WBC and ask about extra financial help to help you pay your rent: a ‘Discretionary Housing Payment’.  Local councils have a limited amount of money available to make these payments, so you need to explain your circumstances fully and probably provide a financial statement, to show why you are struggling to afford your rent. Discretionary Housing Payments are usually only paid for 3 or 6 months initially, but you can apply again at the end of the award.

3. Make sure you are claiming all the benefits you can – for example, money to help with the costs of a disability. £Billions of benefits go unclaimed every year so this really is worth checking.  Contact our Money Advice Team for more information.

4. Consider starting work or, if you or your partner are already in paid work, increasing your hours.

  • If you are getting Universal Credit, then the Benefit Cap will not apply in each month in which you have earned income of £520 or more. If you have a partner your combined wages count.

  • If you live in an area which does not yet have the ‘Full’ Digital Universal Credit Service, or if you live in an area which has the ‘Full’ Digital Universal Credit Service but you have 3 children or more, you may be able to claim Working Tax Credit; if you make a claim – even a nil entitlement excludes you from the Benefit Cap. If you are not working enough hours to claim, try to increase your hours to be entitled to Working Tax Credit.
You will be entitled to Working Tax Credit if:
  • You are a single parent and work 16 or more hours a week.
  • You are a disabled worker and work 16 or more hours a week.
  • You are in a couple, with children, and either:
    o work 24 or more hours a week (you can add your hours together as long as one is working at least 16 hours), or 
    o one of you is working 16 hours a week and the other is incapacitated, a carer, in hospital, or in prison.
  • You are 60 or over and working 16 hours or more a week.
  • You are 25 or over and work 30 hours or more a week.
  • If you get Employment and Support Allowance (and you are not in the Support Group) you could consider doing some work whilst remaining entitled to ESA. The ‘permitted work’ rules allow ESA claimants to work less than 16 hours per week and earn up to £120 per week. Earnings from permitted work do not reduce your entitlement to ESA. So, whilst you would not be exempt from the Benefit Cap by working for less than 16 hours per week, you would have the extra income from your earnings. Please note that if you start doing permitted work you should let the ESA department know straight away. Also, when your capability for work is next reviewed under the Work Capability Assessment, the fact that you have been working and how you have coped with working will be taken into account.
Seek advice from our dedicated employment team.

5. Consider your budget and what you spend your money on – find out more about budgeting.

6. If you have a non-dependant living with you such as a grown up son or daughter, are they paying you enough towards their keep? They should at least pay you the amount of any non-dependant deductionbeing taken from your Housing Benefit or Universal Credit and Council Tax Support, and more towards food and other bills.

7. Consider taking in a lodger.  If you wish to do this you must request permission before any one moves in; and ask us for advice as there are a number of factors you need to consider. Find out more about taking in a lodger in the Bedroom Tax section​ and our Sharing Scheme/Lodger page.
  

​​No, they are regarded as a separate ‘household’ for benefit purposes. The only benefits added together are those of the claimant and their partner and those paid for any children/young people they get Child Benefit for.

  
No, there is a special ‘grace period’ of nine months without being affected by the Cap, for people who claim benefits in the week immediately after losing their job. This gives you nine months to find another job before your Housing Benefit or Universal Credit is reduced.

If you are entitled to Housing Benefit, the rule is that you (or your partner) must have worked at least 16 hours a week in at least 50 out of the 52 weeks before claiming benefits. 

If you are entitled to Universal Credit, you or your partner (or if you are both working – between the two of you) must have earned at least a certain amount in each of the 12 months before losing that job. The amount is £430 net or more in any monthly assessment periods which started before 1 April 2017, or £520 net or more in any monthly assessment periods which started on or after 1 April 2017 onwards.
  

​​Although this may be tempting it could have knock-on effects on other benefits, now and in the future. You could lose ‘passported’ benefits such as free prescriptions, free school meals, cold weather payments and access to budgeting loans, you could miss out on credited National Insurance contributions which may mean a reduced state pension, you could lose the right to be regarded as incapacitated or lose extra money given to you because you are regarded as disabled – all sorts of things – instead try one of the options given in the frequently asked question above.

  

Although this may be tempting it could have knock-on effects on other benefits, now and in the future. You could lose ‘passported’ benefits such as free prescriptions, free school meals, cold weather payments and access to budgeting loans, you could miss out on credited National Insurance contributions which may mean a reduced state pension, you could lose the right to be regarded as incapacitated or lose extra money given to you because you are regarded as disabled – all sorts of things – instead try one of the options given in the frequently asked question above.