In this article
- How the benefits cap system works
- How it might affect the amount of housing benefit you receive
- Who is exempt from the benefits cap
The benefits cap puts a weekly limit on the amount of benefits you can claim and receive. The system was launched in April 2013 in selected areas with the rest of the UK from July 15th and comes into force from August 12th.
The benefits cap is straightforward:
- The maximum single parents or couples with children can receive is £500 per week
- The maximum for a single person is £350 per week
This will affect the level of housing benefit you can receive, as it may have to be reduced to keep within the overall capping limits. This will certainly affect all those who pay high rents.
The benefits affected by capping are:
- Housing benefit (unless you live in supported housing)
- Income support (IS), jobseeker’s allowance (JSA) and employment and support allowance (ESA)
- Child benefit and child tax credits
- Guardian’s allowance
- Carer’s allowance
- Maternity benefits and widows benefits paid by the Department for Work and Pensions (DWP)
- Severe disablement allowance
Benefits not included in the cap:
- Those who receive working tax credit (even if it goes over the £500 limit)
- Child maintenance
- One-off benefit payments such as grants and loans from the social fund
- Maternity and adoption benefits paid through an employer
- Free school meals
- You or your partner are over the state pension credit age
- You or your family receive disability living allowance (DLA) or Personal Independence payments
- Attendance allowance (AA)
- Employment and support allowance (ESA)
- Industrial injuries benefits
- War widows or war widowers pensions
‘Grace Period’ for working tenants
TTV understands there is good news for anyone in work continuously for 12 months – if you are suddenly made redundant or lose your job through no fault of your own, the benefits cap doesn’t apply for the next 39 weeks.
Similarly, if your circumstances change and you find yourself in work you should notify the council immediately as you may be eligible for working tax credit which should take you out of the capping threshold.
How the change might affect you
TTV recommends all tenants in council housing or who receive housing benefits check their situation carefully to see how you will be affected by the cap. This is important because you may find you don’t have enough money to pay the rent.
If you believe you might fall into arrears or face eviction you should contact your council to see if they can offer you any extra assistance. It is possible you might receive a temporary discretionary housing payment.
The whole aim of the governments’ Universal Credit and benefits cap is to encourage people to live more independently. But that won’t be easy for many tenants. TTV urges all tenants to look at their budgets and income and plan accordingly.
Where to go for further help and advice
It is inevitable that some tenants are going to find themselves struggling and if so it is important that you seek advice from a welfare benefits adviser or housing adviser to see just where you stand.
The Department of Work & Pensions has set up a helpline to answer questions about the benefits cap. The number is 0845 6057064 or textphone 0845 6088551 for people with hearing or speech impairments. Lines are open from Monday to Friday 8am to 6pm.
- The benefits cap was introduced in April 2013 and will affect the way housing benefits are calculated
- The cap may well leave you with reduced amounts of housing benefit
- There are some exceptions, so it is worth checking carefully where you fit in
- Seek advice if you are not sure how you will affected