The benefit cap sets a limit on the total amount of benefits that working-age households can receive. Broadly, households on out-of-work benefits no longer receive more in welfare payments than the average weekly wage. The benefit cap is part of the wider reform of the welfare system. It is currently operated through deductions from Housing Benefit payments but increasingly will be administered through deductions from Universal Credit.
The benefit cap was introduced from April 2013 and this evaluation covers the benefit cap’s first year of operation through deductions from Housing Benefit.
Research was carried out by Ipsos MORI and the Cambridge Centre for Housing and Planning Research (CCHPR). DWP analysts carried out the analysis to quantify any behavioural effects of the benefit cap. This was independently peer-reviewed by the Institute for Fiscal Studies (IFS).