The benefit cap is a limit set by the DWP on the total amount of benefit that most people aged between16 to 64 can get. The total amount your household gets from some benefits might go down to make sure you don’t exceed than the cap limit.
A benefit cap is a policy that limits the amount of money that a household can receive in certain types of benefits. In the United Kingdom, the benefit cap was introduced in 2013 as part of the government's welfare reforms.
The benefit cap applies to households that receive certain benefits, including Universal Credit, Housing Benefit, and Child Tax Credit. The cap limits the total amount of benefits that a household can receive to a certain level, regardless of their individual circumstances. The level of the benefit cap varies depending on where the household lives and whether they are receiving benefits as a single person or as a couple.
The aim of the benefit cap is to ensure that households receiving benefits do not receive more in total than the average working household. Supporters of the policy argue that it encourages people to find work and reduces the burden on taxpayers. Critics argue that the benefit cap unfairly penalizes households with children and those living in high-cost areas, and can lead to increased hardship and homelessness.
If a household's benefits exceed the benefit cap, their benefits will be reduced to bring them in line with the cap. In some cases, this may mean that households receive less in benefits than they need to cover their essential living costs. If you are affected by the benefit cap, you may be able to apply for a discretionary housing payment or other forms of financial assistance to help you meet your living costs.
The benefit cap affects the following benefits:
- Bereavement Allowance
- Child Benefit
- Child Tax Credit
- Employment and Support 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 Widow’s Pension if you started getting it before 9 April 2001)
- Universal Credit