The Benefit Cap
In April 2013, the UK Government introduced a cap on the total amount of benefit working age people can receive each week. This is known as the Benefit Cap. This change was introduced in Fife from July 2013 and all affected households were contacted at that time.
The cap has been set at the average take home pay for a working household, £500 per week for lone parents and couples with or without children, and £350 per week for single people without children.
Not all households who receive benefits will be affected by the cap. The cap won’t apply if you, your partner or any children in your household are eligible to receive Working Tax Credits or receive any of the benefits below:
- Attendance Allowance
- Disability Living Allowance
- Personal Independence Payment
- The Support Component of Employment and Support Allowance
- Industrial Injuries Benefit
- War Widow’s or War Widower’s Pension
The benefits that will count towards the cap are:
- Bereavement Allowance
- Carer’s Allowance
- Child Benefit
- Child Tax Credit
- Employment and Support Allowance (unless you receive the support component)
- Guardian’s Allowance
- Incapacity Benefit
- Income Support
- Job Seeker’s Allowance
- Maternity Allowance
- Severe Disablement Allowance
- Widowed Parent’s Allowance
- Widowed Mother’s Allowance
- Widow’s Pension (including the age-related component)
- Housing Benefit (unless you are in Supported Exempt Accomodation)
If your combined income from these benefits is more than the level of the cap your benefits will be reduced. The cap will be applied by reducing the amount of Housing Benefit you receive. The Department for Work and Pensions (DWP) will contact the Council to tell us the amount to be deducted from Housing Benefit and the date this is to start from.
If the cap means Housing Benefit would reduce to below £0.50, then claimant will keep a nominal amount of £0.50 so they can still apply for a Discretionary Housing Payment (DHP) and passported benefits. To find out more about DHP and to download an application form please visit www.fifedirect.org.uk/dhp
When the Council has to reduce Housing Benefit because of the cap we will get in touch to advise this.
If you are affected by the benefit cap, a reduction in Housing Benefit will mean you have to pay more rent. If you are worried about being able to afford your rent then you can ask your Landlord for advice. If you are a Fife Council tenant then please contact your Local Office.
There are some options open to you:
- Get advice to budget and reduce your spending
- If you have a high rent, consider cheaper accommodation – discuss Housing Options with our staff
- Finding work or increasing your hours
Once households have been transferred to Universal Credit, the cap will apply to their combined income from Universal Credit and benefits including Child Benefit and Carer’s Allowance. You will still have to meet your rent from your directly paid benefits.
Benefit Cap Calculator
For more information about the Benefit Cap please visit www.gov.uk/benefit-cap. This site includes a Benefit Cap calculator where you can check your details. You can also call the Benefit Cap helpline on 0845 605 7064.
Example 1 - Gavin, Fiona and their joint family
Gavin and Fiona have a right houseful. This is a second marriage for both of them, and between them they have 4 kids aged between 13 years to 7 months. Between Jobseekers Allowance, Child Benefit and Child Tax Credit, Gavin and Fiona get around £454 a week. They live in a 3 bedroom house, with a weekly rent of £62 a week, bringing their total benefits to £516 a week. When the Benefit Cap is applied they will only be entitled to a maximum of £500 a week, so they will lose out on £16 a week Housing Benefit. Gavin and Fiona will have to make up the difference.
Gavin says: “It seems like a lot of money, but keeping six of us fed, clothed, clean and warm costs a lot. Our caseworker helped us with a weekly budget to help track where every penny goes so that come the changes, we will be able to pay our way."
Welfare Reform - Related links
- Welfare Reform timeline
- Universal Credit
- Scottish Welfare Fund
- Managing your benefits
- Managing your money
- Credit unions
- Income Support
- Bedroom Tax
- The Benefit Cap
- Personal Independence Payment (PIP)
- Claimant Commitment
- Work and Training
- Discretionary Housing Payments (DHP)
- Food Banks
- Citizens Advice and Rights Fife / Citizens Advice Bureau
- Department for Work and Pensions (DWP)
Tel: 03451 55 11 55 Contact Benefits and Council Tax Enquiries online
By Post: Rothesay House Rothesay Place Glenrothes Fife KY7 5PQ