A cap on the total amount of benefit that working age people can receive was introduced in April 2013. This is so a household without work will no longer receive more in benefits than an average working household after tax and national insurance. For benefit purposes, the household includes all dependants and excludes non-dependants.
The current cap limits are
- £423.46 per week if you're in a couple (whether your children live with you or not)
- £423.46 per week if you're single and your children live with you
- £283.71 per week if you're single and you don't have children, or your children don't live with you
How is the cap calculated?
The cap is applied to the total amount people in your household (you, your partner and any children living with you) get from certain benefits.
However, in certain cases the cap will not be applied if anyone in your household qualifies for Working Tax Credit or receives any of the benefits that aren't included in the cap.
Supported exempt accommodation
If you live in supported accommodation, Housing Benefit is not included as part of your income for cap purposes. This does not mean you are exempt from the cap, but does mean you are unlikely to be affected.
Job loss through no fault of your own
There is a grace period whereby the benefit cap will not be applied for 39 weeks if you have been in work continuously for the previous 12 months and lose your job through no fault of your own.
Possible solutions if benefit is capped
You must take action if you are affected by the cap. If your benefit is reduced you must make up the shortfall to your rent. You could:
- Move to cheaper accommodation
- Negotiate a rent reduction
- Find work or increase your hours of work
- Reduce your outgoings
You may be able to apply for a Discretionary Housing Payment if you experience hardship as a result of the Benefit Cap.