The Benefits Cap

What is the benefits cap?

The benefits cap is a limit on the total amount of benefit most people can get if they are of working age (usually 16 – 64). It is part of the government’s welfare reform strategy. 

It is important to note that if you, your partner or your child receives Disability Living Allowance (DLA) or Personal Independence Payment the benefits cap will not apply to you regardless of whether your income exceeds the cap. There is more information on this and other exemptions below. 

It applies if you receive housing benefit. This means that your overall benefits income will be assessed, but the money you lose will only be taken from your housing benefit. The cap also applies if you receive Universal Credit. See our separate Universal Credit information for more.

Benefit cap amounts

Outside Greater London

  • Couple (with or without dependent children): £384.62 per week 
  • Lone parent with dependent children: £384.62 per week
  • Single person without children: £257.69 per week

Inside Greater London

  • Couple (with or without dependent children): £442.31 per week 
  • Lone parent with dependent children: £442.31 per week
  • Single person without children: £296.35 per week

The benefits cap could mean that some people may lose all of their housing benefit if they are receiving income from benefits over the capped amount. There is a notional award of £0.50 towards housing benefit if you are not entitled to any housing benefit as a result of the cap.

Example

A couple receive income from benefits of £700 per week. £100 is housing benefit.

The benefit cap for a couple is £384.62. They receive £315.38 more in benefits than the capped amount.

This amount (£315.38) will be deducted from the housing benefit (leaving no housing benefit). A notional award of £0.50 will be left in place, meaning that £99.50 will be deducted from their benefits income.

Although the couple will still be receiving £600 (above the capped limit) this is because the cap only currently applies to their housing benefit.

What benefits are taken into account when working out my total benefits income?

The benefits cap will apply to your total income from the following sources:

  • Jobseekers Allowance
  • Incapacity Benefit
  • Employment and Support Allowance (unless you are being paid the support component)
  • Carer’s Allowance
  • Income Support
  • Child Benefit
  • Child tax credit
  • Housing Benefit (unless you are in supported living – see below)
  • Severe disablement allowance
  • Guardian’s Allowance
  • Maternity Allowance
  • Bereavement Allowance
  • Widowed Parent’s Allowance, Widowed Mothers Allowance or Widow’s Pension
  • Universal Credit

Some benefits are not taken into account in working out your total benefits income, including:

  • Council Tax Reduction
  • Pension Credit
  • State Retirement Pension
  • Winter Fuel Allowance
  • Statutory Sick Pay
  • Statutory Maternity Pay
  • Statutory Paternity Pay
  • Adoption Pay
  • Non cash benefits such as free school meals

If you receive any of the disregarded benefits, it does not mean that you will be exempt from the cap overall. These benefits will simply be disregarded by the Department for Work and Pensions when calculating your total benefits income, but other benefits may still be counted.

I live in supported accommodation. Will my housing benefit be included when working out my total benefit income?

In some types of supported accommodation, your housing benefit won’t be included when working out your total benefit income. 

Your housing benefit will not be included when working out your total benefit income if you live in:

  • Accommodation where you're provided with care, support or supervision. The accommodation must be provided by a county council, housing association or voluntary organisation, or
  • A ‘resettlement place’ (usually designed for vulnerable adults who have been homeless)

This includes supported living for people with learning disabilities and adapted housing for disabled people.

Are there exemptions from the benefits cap?

Yes. If you are in one of the exemption categories this will mean that the benefits cap will not be applied to any of your benefits, even if your benefits income is above the cap amount. You will not be subject to the cap if:

  • You or your partner receive Disability Living Allowance
  • You or your partner receive Personal Independence Payments
  • Your child receives Disability Living Allowance
  • You or your partner receive the support component of Employment and Support Allowance
  • You or your partner qualify for working tax credit (whether or not you are actually paid it)
  • You or your partner qualify for Pension Credit although you will not be exempt if you are in a mixed-age couple and one of you is claiming a working age means-tested benefit (such as income related ESA, income-based JSA or Income Support)
  • You receive industrial injuries disablement benefit
  • You live in a care home or hospital
  • You or your partner receive Carer’s Allowance (or you are entitled to Carer’s Allowance but are not actually paid it.)
  • You or your partner receive Guardian’s Allowance
  • You or your partner had been in employment for at least 50 weeks out of the 52 weeks before your last day of employment 

If any of these categories apply you will be exempted from the benefits cap entirely. If you are not sure whether you qualify for Employment and Support Allowance (support component), Working Tax Credit or Pension Credit see our separate information on these benefits.

What can I do if I am exempt from the benefits cap?

If you affected by the benefits cap you can contact the Department for Work and Pensions to discuss it with them. If you receive housing benefit and wish to discuss the benefits cap with the DWP you should contact them on 0345 605 7064 (8am to 6pm) or textphone 0345 608 8551.

If you are receiving Universal Credit and wish to discuss the benefit cap with the DWP you should contact them on 0345 600 0723 or textphone 0345 600 0743.

When you call these numbers the helpline can advise on the general rules of the benefits cap. They will not advise you on your own personal circumstances. They are likely to direct you to your local council to discuss your case.

If you are affected by the benefits cap consider the following:

  • If you or your partner can increase your hours of work so that you can claim Working Tax Credit, this will exempt you from the cap.
  • If you or your partner (and for Disability Living Allowance, your child) can claim any of the exempted benefits listed above, this will exempt you from the cap.

Also consider whether your benefits entitlement may change over the next few months to a year. Will there be any changes of circumstances which would mean your overall benefits entitlement would decrease (possibly taking you under the cap limit) or increase (possibly taking you over the cap limit).

If your housing benefit is capped you can apply for a ‘discretionary housing payment’ from your local authority. These are not permanent however and usually last for a maximum of 26 weeks. They can cover rental payments, rental deposits and help with costs if you decide to move home.  

If you are a parent of a disabled child who does not qualify for DLA there may be other help available from social services, including financial assistance. This may involve social services assessing your situation. 

If you think the Department for Work and Pensions has made a mistake or you are unhappy with their decision please contact the Information and Advice Service.

 

First published: Tuesday 25 February 2014
Updated: Tuesday 29 November 2016