Benefit cap

welfarechangesWhat is it?

In April 2013 the cap on the overall amount of benefits that can be claimed will take effect. It is set at a maximum of £26000, or £500pw per couple or lone parent, and £350pw per individual without children.

The cap will be administered by Local Authorities (LAs) until the introduction of Universal Credit (UC) in October 2013, and will continue to be administered by LAs for claims that have not been converted into UC (until 2017). This means that where benefits claimed are over these amounts, but do not contain a housing benefit element, they will continue without the cap until they are transferred to UC.

Who will it affect?

This policy will mainly affect families who are out of work, and are either:

a. Larger than average, in the most part with three or more children, and thereby receiving larger than average Child Tax Credit payments and Child Benefit payments;


b.situated in high-rent areas, and thereby receiving large Housing Benefit payments;


c. both of these factors combined.

Exclusions apply to:

  • Working Tax Credit claimants
  • Households getting DLA, PIP, Industrial Injuries benefit (and equivalent payments made as part of a War Disablement Pension or the Armed Forces Compensation Scheme)
  • People claiming the Support Component of ESA
  • War widows and war widowers

The benefit cap will not be applied for 39 weeks to those who have been in work for the 12 months prior to claiming benefit.

It is estimated that initially 56,000 households will be affected, losing an average of £93 p.w. 15% of those affected will lose more than £150 per week. The number of adults affected is 80,000 and the number of children 190,000.

Location of households affected

A large majority of households affected (52,000) are in England. Around three percent of affected households are in Wales (around 1,500); and around four percent are in Scotland (around 2,500);

By region, 49 per cent of affected households are in Greater London. The shares of other English regions are all less than ten per cent, with the South East having 9 percent (5,000) and the North West and West Midlands both 7 per cent (4,000) and all other regions less than that;

By local or unitary authority, almost three quarters of areas have fewer than 100 households affected. The local authorities with more than 1,000 households affected(in the year 2013/14) are as follows: Birmingham, Brent, Ealing, Enfield, Hackney, Haringey, Newham, Redbridge, Tower Hamlets, the City of Westminster.