Press release

Benefit Cap starts in London

The benefit cap started on 15 April 2013 in the London boroughs of Haringey, Enfield, Croydon and Bromley.

The benefit cap started today in four London boroughs – as the move to set a clear limit on benefits takes effect.

Claimants in Haringey, Enfield, Croydon and Bromley will see their benefit claims limited to £500 a week – or £26,000 a year – for couples and those with children and at £350 a week for single people.

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

Secretary for Work and Pensions Iain Duncan Smith said:

The benefit cap is a key part of our reforms to restore fairness to the welfare state.

It will provide clear incentives for people to get into employment and will give taxpayers the assurance that high claims out are no longer possible.

We have also ensured vulnerable people are protected with clear exceptions for people claiming disability benefits.

But we have a very clear message: we will provide support to those who need it, but the days of outrageous claims giving people incomes far above those of hard working families are over.

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

The benefit cap will not affect a household if a member is entitled to Working Tax Credit, increasing the incentive to find work.

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.

Notes to Editors:

Benefit cap: fact sheet

What is it?

From 15 April 2013 a cap will 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.

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.

How will the benefit cap come in?

The benefit cap will start 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 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 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 State Pension Credit will not count towards the cap.

Further support is provided by an online calculator at: http://www.gov.uk/benefit-cap

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