Will you be affected by the new benefit cap level?
What is the benefit cap?
The benefit cap limits the total amount of money that can be paid to you from certain benefits. If the cap applies to you, it means the amount of housing benefit or universal credit you are paid will be reduced.
The benefit cap only applies to you if you receive housing benefit or universal credit.
What is changing?
The cap amount and the benefits that are affected by the cap will change on 7 November 2016.
- Any time between 7 November 2016 and January 2017 the benefit cap for single parent families will be lowered from £500 per week to £384.62 per week.
- Carers allowance, guardians allowance and payments towards carer’s costs in Universal Credit will no longer be included in the cap from 7th November 2016.
- The cap does not apply to you if you are entitled to guardian’s allowance, carer’s allowance or the carer element is included in your universal credit award
In what circumstances will the benefit cap not apply?
The benefit cap won’t apply to all single parent families it will depend on your circumstances.
If you already claim housing benefit, your local council will contact you to let you know if your benefit will be reduced and will tell you when the change will affect you. If you are claiming Universal Credit the DWP will inform you by letter, and you will get details of any changes once your claim has been re-assessed.
The benefit cap will not apply to you if:
- You are not receiving housing benefit or universal credit
- You work and are eligible for Working Tax Credits
- You are entitled to guardian’s allowance, carer’s allowance or the carer element is included in your universal credit award
- You work and get Universal Credit, and your household income is more than £430 a month after tax and National Insurance
An example of how the benefit impacts income
Megan has 2 children, 12 year old Ewan and 3 year old Daisy. She lives in a privately rented 3 bedroom flat in Edinburgh. She is currently unaffected by the £500 per week benefit cap and gets full help to pay her rent , but will be when it is reduced to £384.85 per week she will have to pay towards her rent. See table below:
|Megan receives the following weekly benefits:|
|This means she will have to pay £26.53 per week towards her rent.|
|Child tax credit||£117.18|
|Total weekly amount||£411.15|
|New benefit cap||£384.62|
|Amount Megan is over the new benefit cap||£26.53|
The benefits that are taken into account for the benefit cap include the following:
- Universal credit
- Child benefit
- Child tax credit
- Maternity allowance
- Income support
- Jobseeker’s allowance
- Employment and support allowance (work group)
- Housing benefit
- Widowed parent’s allowance, widowed mother’s allowance and bereavement allowance
The following benefits are not included in the benefit cap
- Discretionary housing payments
- Bereavement support payment
- Social fund payments
- Council tax reduction
- Statutory sick pay
- Statutory maternity or adoption pay
The benefit cap does not apply if you are receiving certain benefits including:
- Working tax credit
- Employment and support allowance (support group)
- Disability living allowance (including DLA for children)
- Universal credit: the LCW and LCWRA elements
- Personal independence payment
- Carer’s allowance
- Guardians allowance