Press release

Benefit cap – final stage starts

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

The benefit cap started in the final council areas on 12 August 2013 and will be completed nationally by the end of September.

The benefit cap starts today (12 August 2013) in the final council areas, following the successful roll-out across the majority of the country.

Benefit claims in the final 40 council areas will start to be capped at £500 a week for couples and those with children and at £350 a week for single people.

The benefit cap is now in place in 340 local authority areas across the country and will be completed nationally by the end of September 2013.

In total around 40,000 households will have their benefits capped.

Work and Pensions Secretary Iain Duncan Smith said:

The benefit cap is a major step forward in creating a welfare state that actively helps people get back on their own two feet, instead of providing pay-outs that are out of reach of the average hard-working family.

Within the cap, there is a very clear incentive for people to work, as those claiming Working Tax Credit will be exempt and Universal Credit builds on this, ensuring claimants know they are better off in work than on benefits.

It is clear the public support the benefit cap as for too long the taxpayer has propped up a broken system. This government is returning common sense to the welfare state at last.

Early roll-out of the benefit cap began in April with 4 local authorities in London. National roll-out of the benefit cap started in July and has seen local authorities divided into two groups.

The first group of council areas includes all local authorities with 275 households or fewer affected. The second group starting today covers local authorities with 276 or more households to be capped.

Since April last year, Jobcentre Plus has been working with people who may be affected by the benefit cap.

Jobcentre Plus teams have helped around 14,000 claimants identified as living in potentially capped households into work since April last year and 34,500 people have accepted an offer of employment support. Read our report on how Jobcentre Plus teams have helped claimants potentially impacted by the benefit cap.

Background

The benefit 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.

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
  • 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 dependants.

There will be a ‘grace period’ during which 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.

More information

We’ve published a benefit cap calculator and other information for people who may be affected by the cap.

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