One of the many new measures brought in by the government as part of their reforms of the benefit system was the introduction of a benefits cap. This was introduced in order to make sure that people who are claiming welfare are not seen to be gaining an unfair amount of money through government payments.
There has been some controversy over the scheme – with those who are in favour arguing that it treats those who are dependent on hand-outs are encouraged where possible to go back to work, and those who are against saying that it traps the most vulnerable in a cycle of living hand to mouth. However, there appears to be no real urge to change the scheme, with each end of the political spectrum looking to back a cap on the amount of benefits an individual, couple or family can receive each week.
Who is affected by the benefits cap?
At the moment, only those who are aged between 16 and 64 are capped on the amount of benefits they can receive. However, this is somewhat misleading, as most of those who fall outside of those age brackets are either classed as dependents (i.e. children, who would be classed as being part of a family) or will be over state pension age, and therefore no longer able to receive most benefits anyway.
The benefits cap is calculated on the people living within the house who claim benefits – and is normally judged on the amount of adults who are drawing benefits. There is some grey area over those who have adult children living in their home, and those who have lodgers or other adults living with them. In these cases, it is best to speak to a member of the relevant welfare teams, who will be able to advise further on how this could affect you.
What is the limit on benefits that I can receive?
As of 2015, the limits set in place are still up for debate (with those for the cap often arguing it is too high, and those against saying it is too low). However, the current system has benefits limited at these amounts, depending on individual circumstance:
- £350 per week for a single adult, living alone (i.e. they either have no children, or their children do not live with them)
- £500 per week for single parents who have their children living with them
- £500 per week for couples (which works out at £250 per week, regardless of whether they have children living with them or not)
This total includes all forms of benefit that are being received – so the total sum can include any money spent on rent, as well as any other payments made directly to the claimant.
Which benefits are included in the cap?
The list of benefits that are included in the scheme is lengthy, and includes the majority of the most popular forms of welfare payment. This is inclusive of all forms of benefit that anyone in your household may be claiming. The full list reads as follows
- Bereavement Allowance
- Carer’s Allowance
- Child Benefit
- Child Tax Credit
- Employment and Support Allowance (ESA) – although the ‘support’ element is exempt from the cap
- Guardian’s Allowance
- Housing Benefit (i.e. rent paid on behalf of a claimant)
- Incapacity Benefit
- Income Support
- Jobseeker’s Allowance (JSA)
- Maternity Allowance
- Severe Disablement Allowance (SDA)
- Widowed Parent’s Allowance (also including Widow’s Pension and Widowed Mother’s Allowance, if the claim started before April 9th 2001)
Which benefits are exempt?
One of the less contentious issues is the list of benefits that are currently exempt from being included in the benefits cap. this is due to the fact that many of these payments are based around paying some of the most vulnerable members of society, and limiting the amount of funds that they receive could massively affect their standard of living.
The benefits cap will not affect your household if one of the claimants living with you claims one of the following:
- Armed Forces Independence payments
- Attendance Allowance
- Disability Living Allowance (DLA)
- Employment and Support Allowance (ESA), but only the support element
- Industrial Injuries Benefit, or the equivalent payments that are run as part of the armed forces compensation scheme
- Personal Independence Payment (PIP)
- War Pension
- War Widow/War Widower’s Pension
- Working Tax Credit
If you are worried that you may be getting the wrong amount in benefits, it is always advisable to speak to an advisor who will be able to accurately assess whether you are earning the correct amount – and can make the necessary provisions if you are not.