Press release

Benefit cap complete in 4 London areas

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The benefit cap has been successfully delivered in 4 London areas.

The benefit cap has been successfully delivered in 4 London areas – a key step in the government’s efforts to create a fair welfare state that supports families who want to work hard and get on.

In total, just over 2,400 households were capped in the boroughs of Enfield, Haringey, Bromley and Croydon, new figures reveal.

Nationally since April last year, Jobcentre Plus has been helping those claimants potentially affected with 12,400 having moved into work and 32,300 having accepted employment support.

Secretary of State for Work and Pensions Iain Duncan Smith said:

The benefit cap returns fairness to the benefits systems. It ensures the taxpayer can have trust in the welfare system and it stops sky-high claims that make it impossible for people to move into work.

The limit of £500 a week ensures no-one claims more in benefits that the average household and there is a clear reason for people to get a job – as those eligible for Working Tax Credit are exempt.

Over the last year Jobcentre Plus has targeted extra support on this specific group of people to help them find and stay in work.

Universal Credit will build on this, so claimants will know they are always better off in work on their own 2 feet than sticking on benefits.

From 15 July the national roll-out of the benefit cap will take place to cover an estimated total of 40,000 households limiting benefit payments to £500 a week or £26,000 a year.

The cap will apply to combined income from the main out-of-work benefits:

  • Jobseeker’s Allowance
  • Income Support
  • Employment and Support Allowance
  • other benefits such as Housing Benefit, Child Benefit and Child Tax Credit

The benefit cap will not affect a household if a member is entitled to Working Tax Credit.

All households which include somebody who is receiving Disability Living Allowance will be exempt as will those who receive a War Widow’s or Widower’s Pension.

The benefit cap will not be applied for 39 weeks to those who have been continuously in work for the previous 12 months.

The cap limits will be set at £500 a week for couples, with or without children, and lone parent households, and at £350 a week for households of a single adult with no children.

Read figures released today (3 July 2013)

Further information about the Benefit Cap

Benefit cap fact sheet

What is it?

The cap limits will be set at £500 a week for couples, with or without children, and lone parent households and at £350 a week for households of a single adult with no children.

From 15 April 2013 a cap was be introduced on the total amount of benefit that working-age claimants can receive.

Households on out-of-work benefits will no longer receive more in benefits than the average weekly wage, after Tax and National Insurance.

How will the benefit cap come in?

The benefit cap started from 15 April 2013, in Bromley, Croydon, Enfield and Haringey local authorities in London.

It will be implemented nationally from 15 July with all appropriate households capped by the end of September.

Which benefits count towards the cap?

The cap will apply to combined income from the main out-of-work benefits, Jobseeker’s Allowance, Income Support, and Employment and Support Allowance, and other benefits such as Housing Benefit, Child Benefit and Child Tax Credit and Carer’s Allowance.

One-off benefits, for example Social Fund Loans and non-cash benefits such as Free School Meals, will not be included in the assessment of benefit income.

Exemptions

Work is the best route out of poverty, which is why the benefit cap will not affect a household if a member is entitled to Working Tax Credit, increasing the incentive to find work.

In recognition of their additional needs, all households which include somebody who is receiving the following benefits will be exempt from the cap:

  • Disability Living Allowance

  • Personal Independence Payment

  • Industrial Injuries Benefit

  • those receiving War Disablement Pension and the equivalent payments from the Armed Forces Compensation Payments Scheme

  • Attendance Allowance

  • the support component of Employment and Support Allowance

People who receive a War Widow’s or Widower’s Pension will be exempt, as a part of the government’s commitment to those serving or who have served in the Armed Forces and to their dependents.

There will be a ‘grace period’ whereby the benefit cap will not be applied for 39 weeks to those who have been continuously in work for the previous 12 months.

The cap will only apply to people of working age so income from Pension Credit will not count towards the cap.

Further support is provided by an online calculator

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