Guide

Benefit cap

The benefit cap is a limit on the total amount of benefit that most people aged 16 to 64 can claim.

Outline

The benefit cap limits the total amount of benefits that people can claim, to £500 per week for single parents and couples with children, and to £350 per week for single people.

Housing benefit is reduced to prevent the total exceeding the limits.

The benefits that are included in the cap are:

  • Bereavement Allowance
  • Carer’s Allowance
  • Child Benefit
  • Child Tax Credit
  • Employment and Support Allowance (excluding the Support Group)
  • Guardian’s Allowance
  • Housing Benefit
  • Incapacity Benefit
  • Income Support
  • Jobseeker’s Allowance
  • Maternity Allowance
  • Severe Disablement Allowance
  • Widowed Parent’s Allowance (or Widowed Mother’s Allowance or Widow's Pension people started getting before 9 April 2001). 

The cap doesn't apply to people who work enough hours to claim working tax credits. Some benefits are exempt from the cap – such as disability living allowance and the personal independence payment. 

Problems 

The benefit cap has been a problem in London in particular, where high rents and high housing benefit claims mean that limits are easily reached. Larger families in bigger houses are likely to be most affected; 73% of the individuals hit by the benefit cap are children; and there have been stories about families being priced out of London.

Some discretionary housing payments have been used to cover rent shortfalls caused by the benefits cap.

Campaigning groups like the Focus E15 mothers have concentrated on this problem. This group of young homeless parents were housed in the Focus E15 temporary accommodation hostel in Stratford. They were served notices to quit when Newham Council cut their Supported People funding. Newham told them that they would be sent to live in parts of the country where rents were cheaper. 

The mothers were concerned about moving away from the free childcare their families could provide while they were at work and at college, and about being moved to areas where unemployment was high. They were also concerned that they would have to keep moving house if they were placed in short-term private rentals. That constant moving would be particularly disruptive for their children, who would have to keep changing schools. 

Campaigning has seen some of the mothers placed in year-long private rentals in London. They have still not found secure social housing. 

Links

Benefit cap
Government web page explaining the cap and who is and isn’t affected.

The families priced out of their London homes by benefit cap
Guardian article on families faced with moving to cities as far afield as Grimsby, as the new benefit cap hits, together with the high cost of renting in the capital.

Young mothers occupy Newham council to fight for social housing for all: Focus E15
False Economy account of the E15 Mothers’ campaign, including video footage.

Mothers and Welfare Reform
Touchstone report on how many of the cuts seemed to be targeted at women, and, more specifically, mothers.