Benefit Cap

What is the benefit cap?

The benefit cap limits the amount of Housing Benefit or Universal Credit a working age claimant can receive if the total amount of specific benefits they receive exceeds a certain threshold.

The purpose of the cap is to encourage people into work and to ensure those who are out of work do not receive more in benefits than the average working household.

Find out more about the benefit cap on the Department for Work and Pensions website.

What is changing?

From 7 November 2016 the benefit cap threshold will be reduced from £300 to £257.69 per week for single claimants and from £500 to £384.62 per week for claimants who are part of a couple or have children. Different rates apply to those living in London.

Also from 7 November 2016, claimants receiving Carers Allowance and Guardians Allowance will be exempt from the benefit cap.

How is the benefit cap calculated?

Calculating the benefit cap consists of adding up entitlement of all specified benefits and comparing the total to the threshold relevant to your circumstances. If the total is above the threshold, the difference is subtracted from your Housing Benefit or Universal Credit claim.

The benefit cap is determined by the DWP, NOT the Local Authority.

What benefits are included in the benefit cap calculation?

The benefits included in the benefit cap calculation are:

  • Bereavement Allowance
  • Child Benefit
  • Child Tax Credit
  • Employment and Support Allowance (unless it includes the support component)
  • Housing Benefit**
  • Incapacity Benefit
  • Income Support
  • Jobseeker’s Allowance
  • Maternity Allowance
  • Severe Disablement Allowance
  • Universal Credit
  • Widowed Parent’s Allowance
  • Widowed Mother’s Allowance
  • Widow’s Pension 

** HB is not included for claimants living in supported accommodation.

What happens if my total benefits are over the limit?

If the total amount you receive is over the limit, your housing benefit or Universal Credit will be reduced to make sure you do not get more than the benefit cap. This means you will have to pay more towards your rent.

Example: A couple with children receive total weekly benefits of £400 per week, including housing benefit of £100 per week. The benefit cap for a couple from 7 November 2016 is £384.62 per week; therefore their housing benefit will be reduced by £15.38 per week. They will have to pay the shortfall to their landlord.

Who is exempt from the benefit cap?

If you or your partner receive any of the following benefits, you are exempt from the benefit cap:

  • Disability Living Allowance (also applies if claimant or partner is responsible for a child receiving DLA)
  • Personal Independence Payment
  • Attendance Allowance
  • Employment and Support Allowance which includes the Support Component
  • Universal Credit which includes the Limited Capability for Work-Related Activity Element
  • Industrial Injuries Benefits (and equivalent war disablement pensions and payments under the Armed Forces Compensation Scheme)
  • War Widows and War Widowers pension
  • Carer’s/Guardian’s Allowance* or Universal Credit with the Carer Element*
  • Working Tax Credit
  • Universal Credit where the claimant has £430 in monthly earnings from work

For claimants in receipt of HB, a claimant is exempt from the benefit cap for 39 weeks if they or their partner were in work or self-employed for 50 out of the last 52 weeks before their last day of work and that person was not entitled to JSA, ESA, or IS during that time.

For those in receipt of UC, a household is exempt for nine months if their earnings are now below £430 per month but their earnings were above £430 per month in each of the 12 months immediately preceding the current assessment period.

* Only has effect from 7 November 2016

How do I know if the benefit cap applies to me?

You can use the benefit cap calculator to find out if the benefit cap affects you. If it does, you will receive a letter from Aberdeenshire Council advising you how much your Housing Benefit has been reduced by and the date this will start from.

If my benefits are capped I may struggle to pay my rent. Is there any help available?

If you are in receipt of Housing Benefit or Universal Credit that includes the Housing Element, you may be eligible for a Discretionary Housing Payment (DHP) to help with the shortfall in your rent.

For more information about DHPs click here.

What if I still have questions?

If you have any questions about DHP or Housing Benefit, you can contact the Aberdeenshire Advice and Support Team on:

asat@aberdeenshire.gov.uk or

03456 08 12 00

If you have questions about the benefit cap, you can contact the DWP’s benefit cap hotline on:

03456 05 70 64

Finally, if you require money advice because of the cap or if you think the cap has been applied to you in error, you can contact an advice agency near you who may be able to help.

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