Benefit Cap Briefing
• From April 2013, a cap will be introduced on the total amount of benefit that working-age people can receive so that households on out-of-work benefits will broadly no longer receive more in welfare payments than the average weekly wage for working households.
• The aim of the policy is to achieve long term positive behavioural effects through changed attitudes to welfare, responsible life choices and strong work incentives.
• On its introduction in 2013, the cap will be set at £500 per week for couple and single parent households; and at £350 per week for single adult households without children.
• The cap will apply to the combined income from benefits including:
• the main out-of-work benefits (Jobseeker’s Allowance, Income Support and Employment & Support Allowance except where the Support Component is in payment);
• Universal Credit on its introduction
• Housing Benefit
• Child Benefit
• Child Tax Credit, and
• Other benefits such as Carer’s Allowance
• One-off payments, for example, Social Fund Loans and non-cash benefits, such as Free School Meals, will not be included in the assessment of benefit income.
• In recognition of their additional needs, all households* which include somebody who is receiving Disability Living Allowance, Personal Independence Payment, Industrial Injuries Benefit (and those receiving War Disablement Pension and the equivalent payments from the Armed Forces Compensation Payments Scheme), Attendance Allowance or receiving the support component of Employment Support Allowance will be exempt from the cap.
• War widows and war widowers will also be exempt.
• Households with a member who is entitled to Working Tax Credit will also be excluded from the benefit cap. This will increase the incentive for people on out-of-work benefits to find jobs because once they are in receipt of Working Tax Credit - or the earnings equivalent under Universal Credit - their benefits will no longer be capped.
• The benefit cap will apply from 15 April 2013 in Croydon, Bromley, Enfield and Haringey Local Authority areas.
• It will be implemented in all other Local Authorities from 15 July 2013. All households identified as being appropriate to be capped will, in line with existing plans, be capped by the end of September 2013.
• In the first instance the benefit cap will be delivered by Local Authorities through Housing Benefit payments. In the long term it will be administered as part of the new Universal Credit system.
• A grace period whereby the benefit cap will not be applied for 39 weeks will apply to those who have been in work for the previous 12 months.
• Housing Benefit (HB) paid to households in supported exempt accommodation (SEA) is being disregarded from the benefit cap. The disregard will apply both to benefit cap cases under HB from April 2013 and under Universal Credit (UC).
Support for affected claimants
• Jobcentre Plus has been contacting claimants potentially affected by the benefit cap since May 2012 to ensure they receive the support they need to move them closer to employment.
• In May 2012 letters were sent to all those claimants identified at that time who may be affected. Claimants that have been identified as potentially affected since May were written to in July 2012. A further letter was issued between 20 September and 5 October 2012 to all claimants likely to be affected. These letters gave an estimate of the weekly loss (in bandwidths of £50) to claimants whose benefits are more than the cap allows.
• Between 6 and 8 February 2013, the Department sent out approximately 20,000 letters to all those potentially affected from 15 April and to newly identified cases, affected from 15 July 2013, which we have not written to previously. During March 2013, further letters will be sent out to those affected outside of the four London boroughs to tell them the benefit cap will now apply to them from 15 July 2013.
• All letters will provide information about available employment support, benefit cap helpline and further options available to claimants to help mitigate the cap’s impact.
• A telephone helpline is available for claimants who have received a letter and have further questions. Helpline staff can answer frequently asked questions, offer claimants the opportunity to discuss employment support with their local Jobcentre and signpost claimants to their Local Authority if they have housing related questions.
• From 28th May 2012 an online calculator has been available for claimants to check if the cap may apply to them.
• Jobcentre Plus staff are contacting every claimant potentially affected by the benefit cap (unless they are already engaged with either a Work Programme or Work Choice Provider) to offer them the opportunity to discuss with an adviser what employment support might be available to them. Employment support is also being offered by Jobcentre Plus partners, and claimants likely to be capped can also have early access to the Work Programme
• Where Jobcentre Plus has been unable to contact claimants identified as being vulnerable they will be visited by a DWP visiting officer.
• Local authorities have been working closely with Jobcentre Plus on the employment and skills agenda
• We will provide additional funding for the Discretionary Housing Payments Scheme of up to £65million in 2013/14 and up to £35million in 2014/15. The Scheme allows Local Authorities to make additional payments to people entitled to Housing Benefit where the person needs temporary help with housing costs.
• Prior to the Benefit Cap being applied, DWP will be undertaking a 100% check on information drawn from claimant/household live system records. Once that check is complete the information will be shared with Housing Benefit teams so that they can accurately implement the cap via a deduction from Housing Benefit. As such the data to cap all appropriate households will be sent over several weeks. DWP will continue to work with local authorities on the most appropriate ways to manage the schedule of activity over that period.
* For the purposes of the benefit cap, a household or family unit refers to the benefit claimant, their partner (if they have one) and any child or qualifying young person for whom that adult or couple are treated as responsible when working out their Housing Benefit.
Benefit cap helpline number: 0845 6057064 or textphone 0845 6088551 (for people with hearing or speech impairments).
The helpline is open Monday to Friday 8am to 6pm
Benefit cap online calculator available at: www.gov.uk/benefit-cap