Benefit Cap for people on Universal Credit

Who won’t be affected by the Cap?

The Benefit Cap does not apply to you:

  • In any months in which you or your partner have earned income of £520 or more.
  • If you, your partner, or a child or young person for whom you get Child Benefit, gets Disability Living Allowance, Personal Independence Payment or Armed Forces Independent Payment.
  • If you or your partner are regarded as “having a limited capability for work-related activity”.
  • If you or your partner get Industrial Injuries Disablement Benefit.
  • If you or your partner get a War Disablement Pension, Armed Forces Compensation Scheme payment, or a War Widows’/Widowers’ Pension.
  • If you are entitled to Carer’s Allowance or a Carer Element in your Universal Credit award
  • If you get Guardian’s Allowance
  • If you (or you and your partner) are out of work but had been in work continuously for over 12 months before losing the job and you or your partner (or if you were both working, between the two of you) have earned at least £430 net or more in each of these monthly assessment periods which started before 1st April 2017 .  £520 or more in any monthly assessment periods which started on or after 1st April 2017 onwards or £542.88 or more in any monthly assessment periods which started from 1st April 2018 onwards – you will be protected for a “grace period” of 9 months.

 

How do you work out if the Cap applies?

If you are of working age and not getting one of the benefits / in one of the situations that would exclude you from the Benefit Cap then the DWP will add together most of the benefits you are entitled to (including Child Benefit).

They will then compare this to the Benefit Cap limit that applies to you:

Inside Greater London

  • £1916.67 per month for single parents.
  • £1916.67 per month for couples with or without children.
  • £1284.17 per month for single people without children.

Outside Greater London

  • £1666.67 per month for single parents.
  • £1666.67 per month for couples with or without children.
  • £1116.67 per month for single people without children.

If your total welfare is above this Cap limit you will be affected by the Benefit Cap.

When you add the benefits together do not include: any Child Care Cost Element of the Universal Credit award, Council Tax Support, Statutory Sick Pay, Statutory Maternity Pay, Bereavement Support Payment, Discretionary Housing Payments and Housing Benefit paid on ‘specified accommodation’ (ie certain supported housing – ask us of you’re not sure if this applies to you).

If the total amount of the benefits – including any Universal Credit - you (and your partner) are entitled to   is more than the Benefit Cap limit that applies in any monthly assessment period then your Universal Credit payments will be reduced for that month. If you are struggling to pay your rent because of the Cap then you might be able to get a Discretionary Housing Payment to help you. Contact the Financial Inclusion Team on 0300 111 000 (Parkway Green) or 0800 633 5500 (Willow Park).

 

Example for Wythenshawe

Mahia and Para have 6 children aged 17, 14, 10, 7 and twins aged 3. They have had difficulty finding work, and their rent is £128.00 per week (which works out at £554.67 per month). They live in Benchill.

They are entitled to:

Child Benefit               £  386.53 per month
Universal Credit          £2488.99 per month

Total “welfare”           £2875.52 per month.

As their total welfare income is £1208.85 over their Benefit Cap of £1666.67 per month, their Universal Credit will be reduced by £1208.85 to £1280.14, so they will need to pay for their rent, food, bills etc. out of their reduced Universal Credit and their Child Benefit.

 

Shaun lives in Newall Green. He is a single parent with three children age 11, 9 and 7. He is looking for work. His rent is £110 per week rent for their 3 bedroom house.

Shaun is entitled to:

Child Benefit               £208.43 per month
Universal Credit          £1534.91 per month

Total “welfare”           £1743.34 per month.

The Benefit Cap limit which applies to Shaun is £1666.67 per month.

His ‘excess’ income is £76.67 (£1743.34 minus £1666.67 = £76.67).

So his Universal Credit will be reduced by £76.67 – he will receive £1458.24 per month.

 

View the Government’s Benefit Cap calculator here.

 

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