Are you of working age and currently in receipt of housing benefit? If so, you may be affected by the benefit cap.
What is the benefit cap?
The government is introducing a cap to limit the amount of money a working age household can receive in benefits. From 12 August 2013, the cap limits the amount of money these households can receive to:
- £500 per week for couples and lone parents
- £350 per week for single adults.
If you receive more benefits than the cap allows, your housing benefit will be reduced so that you do not receive more than the cap allows.
Which benefits are included in the cap?
When added together, the benefit cap will limit the total income you can get from the following benefits:
- Bereavement Allowance
- Carer’s Allowance
- Child Benefit and Guardian’s Allowance
- Child Tax Credit
- Employment and Support Allowance except where it is paid with the support component
- Housing Benefit
- Incapacity Benefit
- Income Support
- Jobseeker’s Allowance
- Maternity Allowance
- Severe Disablement Allowance
- Widowed Parent’s Allowance / Mother’s Allowance / Widow’s Pension.
If the amount you receive after these benefits have been added up is more than the cap allows, then your housing benefit will be reduced.
Which households will be exempt from the cap?
The cap only affects working age households. Working age claimants are normally aged over 18 and under the qualifying age for State Pension Credit. Households that are entitled to the following benefits will also be exempt from the cap:
- Working Tax Credit
- Disability Living Allowance
- Personal Independence Payment
- Attendance Allowance
- Support component of ESA
- Industrial Injuries Benefits
- War Widows and War Widowers pension.
How do I find out if I am affected?
The Department of Work and Pensions (DWP) has written to people who may be affected by the cap and tenants will be informed via a housing benefit entitlement letter. We will also write to people that we know have been affected.
The Direct website also has a benefit cap calculator which you can use to see how much your benefit may be cut by. Go to https://www.dwpe-services.direct.gov.uk/portal/page/portal/bcc/lp. It is important that you add the correct details in order to receive an accurate result.
If you are affected by the benefit cap, your housing benefit will be reduced. You will need to use money from your other benefits or income to pay rent. If you don’t continue to pay your rent in full, you could lose your home.
How much will my housing benefit get cut by?
This depends on how much you receive in benefits. For example, if you are a lone parent with dependents who currently receives £550 when the benefits listed above are added together, then your housing benefit will be cut by £50 per week.
If you are a single person with no dependents and you currently receive £375 when the benefits listed above are added together, then your housing benefit will be cut by £25 per week.
What should I do if I am affected?
If you think that you will have difficulty in paying your rent on time, contact us straight away so we can help. We also offer support and advice on employment, training and more.
What can I do to avoid the benefit cap?
The best course of action to avoid the benefit cap is to find employment. If you are in work but not eligible for working tax credits, ask your employer for additional hours.
How else can I increase my household income?
If members of your family are also out of work, we can make an appointment for them to see a specialist benefit adviser. We can also arrange for you to see someone who will help with interview techniques, preparing CV's, access to jobs and job specific training. Contact your estate office for an appointment.
How do I manage a reduction in benefits?
Working out a household budget will help you to work out where your money is going and how best to manage finances.There is a useful online budget planner at https://www.moneyadviceservice.org.uk/en/tools/budget-planner. If you need help completing it, please contact your estate office.