The Welfare Reform Act 2012 gave the Government the power to cap the total benefits to which a single person or couple is entitled.
The cap applies to the total amount that the people in your household get from the following benefits:
- Bereavement Allowance
- Carer’s Allowance
- Child Benefit
- Child Tax Credit
- Employment and Support Allowance (unless you get the support component)
- Guardian’s Allowance
- Housing Benefit
- Incapacity Benefit
- Income Support
- Jobseeker’s Allowance
- Maternity Allowance
- Severe Disablement Allowance
- Widowed Parent’s Allowance (or Widowed Mother’s Allowance or Widows Pension you started getting before 9 April 2001)
How is the cap calculated?
The level of the cap will be set at the average net earnings for a working household:
£500 a week for couples (with or without children living with them)
£500 a week for single parents whose children live with them
£350 a week for single adults who don’t have children, or whose children don’t live with them.
This may mean the amount you get for certain benefits will go down to make sure that the total amount you get isn’t more than the cap level.
Who will be affected?
The cap is targeted at out-of-work-families, regardless of their ability to take up work.
If the total amount of benefits you receive is greater than the limits set your Housing Benefit will be reduced by the excess amount.
The cap will apply to the combined income from the main out-of-work benefits (Jobseeker’s Allowance, Income Support, and Employment Support Allowance) and other benefits such as Housing Benefit, Child Benefit, Child Tax Credit and Carer’s Allowance.
If you are entitled to Working Tax Credit you will be exempt from the cap, as well as if anyone in your household claims Industrial Injuries Disablement Benefit, Disability Living Allowance, Personal Independence Payment, Attendance Allowance or the support element of Employment and Support Allowance.
It is possible that if you are a single parent or couple with 5 or more children you may be affected by the cap, contact us for further details.