The benefit cap is a government policy that limits the total amount of benefits a household can receive.
While intended to encourage work and reduce reliance on benefits, it can have a significant impact on those who are eligible.
Understanding who is exempt from the benefit cap is important if you’re concerned about how it might affect you or someone you know.
What is the Benefit Cap?
The benefit cap is essentially a limit on the total amount of certain benefits a household can receive.
This cap applies to most working-age people in England.
If your household receives benefits that exceed the cap, your Housing Benefit or Universal Credit will be reduced.
The current benefit cap for all qualified recipients is £486.98 per week (£2,110.25 per month or £25,323 per year) for couples and lone parents in Greater London.
Also, £423.46 per week (£ 1,835 per month or £22,020 per year) is for couples and lone parents outside Greater London.
Who is Over the State Pension Age?
One of the most straightforward exemptions from the benefit cap is age.
The Pension age is 66. If you or your partner have reached State Pension age, your household is exempt from the cap.
This means you can receive benefits without having them reduced due to the cap.
People under the age of 16 are also exempt from the benefit cap.
Are You Claiming Working Tax Credit?
If you or your partner are claiming Working Tax Credit, regardless of the amount received, your household is exempt from the benefit cap.
This includes households where one partner works and claims Working Tax Credit, while the other partner is unable to work due to disability or caring responsibilities.
Do You Receive Universal Credit Due to Disability or Caring Responsibilities?
If you or your partner receive Universal Credit because of a disability or health condition that prevents you from working, known as ‘limited capability for work and work-related activity,’ your household is exempt from the benefit cap.
Similarly, if you receive Universal Credit because you care for someone with a disability, you are also exempt.
Does Your Household Include Someone with a Disability?
Even if you don’t meet the criteria for the exemptions mentioned above, your household might still be exempt if someone in your household receives certain disability benefits.
These include: Adult Disability Payment, Armed Forces Compensation Scheme, Armed Forces Independence Payment, Attendance Allowance, Carer’s Allowance, Carer Support Payment, Child Disability Payment, Disability Living Allowance, Employment and Support Allowance (if you get the support component), Guardian’s Allowance, Industrial Injuries Benefits, Personal Independence Payment, War pensions, and War Widow’s or War Widower’s Pension. Â
What is Your Household Income?
There’s another way to avoid the benefit cap, and that is simply earning enough.
If your household income, after tax and National Insurance contributions, is £793 or more a month, you are exempt from the cap.
This is because your income is considered sufficient to meet your needs.
Are You in Receipt of Housing Benefit or Universal Credit?
It’s important to note that the benefit cap only applies to households receiving Housing Benefit or Universal Credit.
If you’re not claiming either of these benefits, you won’t be affected by the cap.
What Happens if You’re Affected by the Benefit Cap?
If your household is subject to the benefit cap, your Housing Benefit or Universal Credit will be reduced.
This can have a significant impact on your finances, particularly if you rely heavily on benefits to cover your housing costs.
It’s important to understand how the cap will affect you and to explore other options for support if necessary.
How Can I Check if I’m Affected by the Benefit Cap?
If you’re unsure whether your household is affected by the benefit cap, you can contact the Department for Work and Pensions (DWP) for clarification.
They can provide information on your specific circumstances and explain any potential impact of the cap.