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All about the benefit cap

How does the benefit cap work?

There is a maximum amount of benefits that working age people who are not employed for 16 hours or more a week can receive. This is called a benefit cap.

Note: The benefit cap doesn’t apply to all families – it will depend on your circumstances. 

If the benefit cap applies to you, the maximum amount that you can receive in benefits is dependent on your location:

• For single parent families in a Greater London borough: £442.31 per week (£23,000 a year).

• For single parent families outside London: £384.62 a week (£20,000 a year)

The benefit cap is applied through housing benefit, or universal credit if you live in a universal credit area.

If you’re receiving over £442.31 a week in London, or £384.62 a week elsewhere, your housing benefit or universal credit will be reduced until your total benefits come down to the cap that applies in your area.

If you’re not receiving enough housing benefit to reduce the overall benefit total to £442.30 a week in London, or £384.62 a week elsewhere, your housing benefit will be reduced to a minimum payment of 50 pence a week. No other benefits will be reduced.

The rules are different if you are claiming universal credit. If you receive universal credit and the benefit cap applies to you then your universal credit will be reduced until you reach the level of the benefit cap.

If you are claiming universal credit, or if you are already affected by the Cap, please call our helpline on 0808 802 0925 for specific advice – calls are free from both landline and mobile.

Will you be affected by the benefit cap?

Use our quick online checker to see if you could be affected – simply answer the questions in this tool and you will get advice based on your situation.

Which benefits are included in the cap?

Most benefits are included in the cap. If you receive more than £384.62 a week (or £442.31 a week if you live in London) in total from the benefits listed below then the benefit cap could affect you. You will not be affected if you belong to a group of people that are exempt from the cap. Always check to see if you could be exempt from the cap.

The cap will apply to the total amount you receive from:

  • Child benefit
  • Child tax credit
  • Income support
  • Jobseeker’s allowance
  • Employment and support allowance – only if you are in the ‘work related activity’ group
  • Housing benefit
  • Maternity allowance
  • Bereavement allowance
  • Incapacity benefit
  • Severe disablement allowance
  • Widowed mother’s allowance
  • Widowed parent’s allowance
  • Widow’s pension
  • Universal credit (unless you receive the limited capacity for work and work-related activity element)

Which benefits aren’t included in the cap?

Not all benefits are included in the cap. When adding up your benefits do not include the following:

  • State pension credit
  • State retirement pension
  • Statutory adoption pay, statutory maternity pay and statutory paternity pay
  • Statutory sick pay
  • Council tax reduction
  • Social fund payments
  • Discretionary housing payments
  • Bereavement payment
  • Non-cash benefits such as free school meals.

Child maintenance payments aren’t included in the cap.

Who is exempt from the cap?

You will be exempt from the cap if any of these scenarios apply to you:

1. You don’t claim housing benefit or universal credit

2. You work and are entitled to working tax credits

3. You work 16 hours a week or more but don’t get working tax credits because you have a higher income

4. You claim universal credit but work and earn £604 or more per month

5. You are a carer or guardian and receive benefits such as:

  • Carer’s Allowance
  • Carer’s element of universal credit
  • Guardian’s allowance

6. You have both limited capacity for work and work related activity

7. You receive a war pension, industrial injuries benefit (or equivalent payments made as part of a war disablement pension or the Armed Forces Compensations scheme

8. You are over state pension credit age

9. You claim certain disability or sickness benefits such as:

  • The support component of employment and support allowance
  • Industrial injuries benefit
  • Attendance allowance

10. It also won’t apply to you if either you claim, or your dependent child receives:

  • Disability living allowance
  • Personal independence payment

Carers Allowance and Guardians Allowance

A new exemption now applies to people receiving carer’s allowance, guardian’s allowance or the carer’s element of universal credit. If you receive any of these benefits, you will be exempt from the benefit cap. See the gov.uk website for more information about which benefits are included in the cap.

You can also use the government’s online calculator.

If you have recently been in work

In some situations the benefit cap won’t apply to you for 39 weeks after you have finished working. The 39 weeks starts to run from the date you finished work, not the date you make a claim for benefits.

  • You must have worked for 50 out of the previous 52 weeks before finishing work
  • It must have been paid work (not volunteering)
  • You can’t have been entitled to income support, jobseeker’s allowance or employment and support allowance.

If you were on maternity leave, paternity leave, adoption leave, or claiming statutory sick pay that is counted as being in work.

Examples of how the benefit cap works

Example 1

Rakesh has three children and lives in a privately rented house in London. He has twins aged two, and a five year old. At the moment Rakesh receives the following weekly benefits:

Income support £73.10
Child tax credit £170.52
Housing benefit £300.00
Child benefit £48.10
Total before benefit cap  

£591.72
 Previous benefit cap £500
New benefit cap (London)

New shortfall for Rakesh

 £442.31

£149.41

Because Rakesh is receiving over £442.31 a week in benefits, and none of the exemptions apply to him, the new benefit cap will apply. The amount of benefit he receives will reduce from his previous benefit cap of £500 to £442.31 a week. As he receives £149.41 a week more than the £442.31 limit, his housing benefit will be reduced by £149.41 a week. This means he will now have a shortfall of £149.41 towards his rent.

Example 2

Avril has six children and lives in a housing association home in Darlington. Avril’s husband died a year ago so she receives widowed parent’s allowance. Her benefit calculation before the cap is applied would be:

Widowed parent’s allowance £112.55
Child tax credits £330.54
Housing benefit £100.00
Child benefit £89.20
Total before the cap is applied

 

Note: only housing benefit can be reduced by the cap

 

Deduction from housing benefit due to benefit cap

 

New benefit capped amount per week

 £632.29

£99.50

£532.79

Because Avril is receiving over £384.62 a week in benefits, and none of the exemptions apply to her, the benefit cap will apply.

Yet for Avril the amount of benefit she receives will not reduce down to £384.62 in her case, because the majority of her benefit income is not from housing benefit.

Only housing benefit can be reduced by the benefit cap, so Avril can avoid the maximum reduction. This is because her other benefits cannot be reduced by the cap.

Avril still has a shortfall of £99.50 a week as a result of the benefit cap.

How will I know if I’m affected?

Your local council should let you know if the benefit cap affects you. You should receive a letter telling you when the benefit cap will apply to you.

You can also use our online benefit cap checker (above) if you think you may be affected. There is also an online benefit cap calculator provided by the government.

The government has a helpline for anyone who has concerns about the benefit cap. The Benefit Cap Helpline is available on 0345 605 7064 and is open 8am to 6pm Monday to Friday. For Welsh speakers the number is 0345 605 7066.

If you are claiming universal credit the benefit cap helpline is 0345 600 072. For Welsh speakers it is 0345 600 3018. You can also contact DWP through the journal in your universal credit online account.

What can I do if I’m affected?

If you, or any of your children has a health condition or disability and aren’t receiving disability living allowance, check whether you’re entitled to it. If you or your child were receiving disability living allowance or the personal independence payment the benefit cap won’t apply to you. Call our helpline 0808 802 0925 for more advice.

If you get housing benefit and work 16 hours a week or more, the benefit cap wouldn’t apply to you. If you work fewer than 16 hours a week are you able to increase your hours to 16 or more? If you are on universal credit and earn less than £520 per month, are you able to increase your hours so that you earn £520 a month or more?

If you’re in private rented housing, would it be possible to find cheaper accommodation? Could you negotiate your level of rent with the landlord?

If you’re in council housing or with a housing association, speak to your housing provider to see if they can offer you help, such as rehousing, or help with your finances.

Apply to your local council for a discretionary housing payment. This is a payment to make up the shortfall in your rent if you are receiving housing benefit or universal credit. The council will decide if you are eligible – they don’t have make a payment, and if they do it’s likely to be for a limited time.

Call our helpline for more advice if you’re affected by the benefit cap or you think it could apply to you.

Other useful organisations

Shelter for housing advice, including housing benefit, bedroom tax, benefit cap, homelessness and housing transfer advice.

Disability Rights UK if you have a disability, including benefits and benefit cap advice

Carers UK for carers, including claiming carer’s allowance and other benefits

Citizens Advice for benefits and housing advice

Further information

Gingerbread single parent helpline

Please call our helpline for advice if you are already affected by the cap. Calls are free.

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