New Benefit Cap Launched
What is the Benefit Cap and how will it affect me?
Following the Governments introduction of a lower benefit cap across the Country, some households will see their annual income reduced by up to £6000. Leading advice Charity Citizens Advice explain the changes and urge people to come and speak to them if they are unsure how it will affect them.
As of today, the Government made changes to introduce a lower limit on the total amount of certain benefits you can get if you are working age. This is called the Benefit Cap. How much you get for certain benefits may go down to make sure the total you get isn’t more than the cap amount. You’re not affected by the cap if you or your partner work, and either of the following apply:
you or your partner are eligible for Working Tax Credit
you or your partner get Universal Credit, and your household income is more than £430 a month after tax and National Insurance
The Benefit Cap will only affect you if you're getting Housing Benefit or Universal Credit. If the cap affects you, your Housing Benefit or Universal Credit is reduced.
How will the Benefit Cap affect you?
If the cap applies to you, this means that if your income from certain benefits is more than the cap, your benefit will be cut. The amount of money you get above the Benefit Cap limit will be taken off your Housing Benefit or Universal Credit. This will only affect you if you're getting Housing Benefit or Universal Credit. No deductions will be made from your other benefits because of the cap. This means that if you don’t receive Housing Benefit or Universal Credit, your benefits can’t be capped.
The Benefit Cap doesn't apply to everyone - some people are exempt.
How much is the cap?
The current cap is:
£500 per week (£26,000 per year) if you’re in a couple, whether your children live with you or not
£500 per week (£26,000 per year) if you’re single and your children live with you
£350 per week (£18,200 per year) if you’re single and you don’t have children, or your children don’t live with you
From 7 November 2016, there are different rates for the Benefit Cap - one for Greater London and one for the rest of the country.
If you’re getting Housing Benefit, the cap outside Greater London is:
£384.62 per week (£20,000 a year) if you’re in a couple, whether your children live with you or not
£384.62 per week (£20,000 a year) if you’re single and your children live with you
£257.69 per week (£13,400 a year) if you’re single and you don’t have children, or your children don’t live with you
If you don’t receive enough Housing Benefit, the cap won’t be applied in full.
The cap is applied differently under Universal Credit. This is because any childcare costs you get as part of Universal Credit aren't counted when your benefit income is being worked out.
Some people are exempt from the Benefit Cap. This means their benefit isn't capped, even if their benefit income is above the limit of the cap. For example, your benefit won't be capped if you get Working Tax Credit, Disability Living Allowance or Personal Independence Payment. It also won’t apply to you if you have reached the age for getting Pension credit- although you may not be exempt if you're in a couple where one of you is above this age and one of you isn't.
What can you do if you are affected by the cap?
If your benefit income is capped, your options are limited. However, there may be ways of making up any shortfall. For example, there may benefits you can claim which aren't included in the cap.
If you are worried about how the cap will affect you, or if you are unsure about what changes will be made to your payments come and speak to an free, independent adviser at Citizens Advice. To find your nearest available office visit www.ruraldevoncab.org.uk/offices or call their Adviceline on 03444 111 444 (Mon-Fri 9am-4pm)