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Benefit cap rules


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What are the Benefit Caps?

Where a single person has allowances, benefits, tax credits and Housing Benefit that totals in excess of £350 per week, that excess will be deducted off their Housing Benefit.

Where a lone parent or couple with or without children have allowances, benefits, tax credits and Housing Benefit that totals in excess of £500 per week, that excess will be deducted off their Housing Benefit.

Any benefits of dependant children are also included in the total household benefits.

The benefits of any non dependants are not included in the total household benefits.

Read the sections below for which allowances, benefits and tax credits are counted, which are ignored and how an exemption from the Benefit Cap is gained.

What benefits are counted for the Benefit Cap?

  • Bereavement Allowance
  • Carer's Allowance
  • Child Benefit
  • Child Tax Credit
  • Employment and Support Allowance (unless you get the support component)
  • Guardian's Allowance
  • Housing Benefit (but not if the Housing Benefit is for Supported Exempt Accommodation)
  • Incapacity Benefit
  • Income Support
  • Jobseeker's Allowance
  • Maternity Allowance
  • Severe Disablement Allowance
  • Universal Credit (from October 2013 onwards)
  • Widowed Parent's Allowance (or Widowed Mother's Allowance or Widows Pension you started getting before 9 April 2001)

What benefits are not counted for the Benefit Cap?

  • Attendance Allowance
  • Bereavement Payment (the new bereavement support payment will also be disregarded)
  • Cold Weather Payments
  • Council Tax Support (formerly Council Tax Benefit)
  • Discretionary Housing Payments
  • Free School Meals
  • Funeral Payments
  • Housing Benefit for Supported Exempt Accommodation*
  • Local Welfare Assistance Payments
  • Pension Credit
  • Social Fund Payments
  • State Retirement Pension
  • Statutory Adoption Pay
  • Statutory Maternity Pay
  • Statutory Paternity Pay
  • Statutory Sick Pay
  • Sure Start Maternity Grants

* Phone us on 020 8274 4903 if you want to check if you are living in Supported Exempt Accommodation.

How can an exemption from the Benefit Cap be gained?

You will be exempt from the Benefit Cap if anyone in your household is getting:

  • Armed Forces Compensation Scheme Payments (that are equivalent to industrial injuries benefits)
  • Attendance Allowance
  • Disability Living Allowance
  • Industrial Injuries Benefits
  • Personal Independence Payment (started 10 June 2013)
  • War Disablement Pension
  • War Widow's or War Widower Pension

You will also be exempt from the cap if you or your partner are getting Employment and Support Allowance with the support component only.

You will also be exempt from the cap if you or your partner are getting or even qualify for Working Tax Credit.

Under normal Tax Credit rules, a single person must be employed for an average of 16 hours per week. A couple must have a combined total of 24 hours per week average. For more detailed advice of Working Tax Credit:

Time limited exemption through grace periods

The DWP will identify those claimants or their partners, who

  • through no fault of their own have lost their job and
  • have been working for at least 50 weeks of the last 52 weeks, before they claims benefits.

Periods that contain statutory maternity, paternity and sick leave can count as work.

In this situation, there will be a grace period of 39 weeks which will exempt and reduction due to the Benefit Cap. Then the Benefit Cap will be applied to their Housing Benefit in the 40th week.

How is the Benefit Cap being introduced in Merton?

The Government introduced the Benefit Cap as pilots in four London boroughs from 15 April 2013. Merton will introduce the Benefit Cap from 15 July 2013, starting with a few identified claims and then more and more of those identified by the Department for Work and Pensions until 30 September 2013. We will apply the Benefit Cap, where relevant when we get the DWP record. Meanwhile, the DWP will also identify any new claims subject to the Benefit Cap, unless there is an exemption.

If you or your partner are affected by the Benefit Cap what options do you have?

Your options will be dictated by how much the Benefit Cap affects you or your partner, if you have one. If the reduction in your HB is less than £10.00 per week, you may be able to:

  • adjust your weekly budget and find extra income to pay the shortfall
  • you may be able to negotiate a reduced rent charge with your landlord, if you are a private tenant

If the Benefit Cap affects you or your partner, if you have one, to a greater extent you may have to make some drastic changes. Here are some options:

  • phone the DWP Benefits Cap helpline number 0845 605 7064
  • start work of 16 hours per week for single people, including lone parents
  • start work, in the case of couples, means an aggregate total of 24 hours per week.
  • qualify for Working Tax Credit under the above hours conditions, which would also mean you are exempt from the Benefit Cap. More information can be obtained from
    • www.hmrc.gov.uk/taxcredits or
    • by phoning the Tax Credits helpline number 0345 300 3900.
  • if you have a social sector landlord like a Housing Association or registered provider of social housing, speak to them. They may have some options to move you to cheaper accommodation.
  • if you have a private landlord, you may need to look further out of London to Local Housing Allowance areas where the LHA rates are lower. This will reduce your Housing Benefit and hence reduce the impact of the Benefit Cap. For more information on this
  • You, your partner of a child of yours, may be able to get an exemption benefit, like:
    • Employment and Support Allowance (with the support component only though)
    • Disability Living Allowance for children
    • Personal Independence Payment

                     Phone our Welfare Benefits Team on 020 8545 4178, if you need help with this.

  • Claim a Discretionary Housing Payment (DHP) for the shortfall. You can get help with this from either:
    • Our Tenant Welfare Officer on 020 8545 3733 or
    • Our Welfare Benefits Team on 020 8545 4178 or

Changes to Benefit Cap amounts and removal of the cap

There will be circumstances where the benefits that are counted up towards the cap, change. The DWP must recalculate this total first and notify us of the new total and cap. This may take a while as some information is collected at the end of each month, like changes to Housing Benefit. If you dispute the total benefits calculated, you must speak to the DWP on their helpline number 0845 605 7064.

If either:

  • a recalculation of the total benefits means the cap is no longer exceeded; or
  • an exemption means the Benefit Cap no longer applies

the DWP will send us a record to remove the Benefit Cap. We will then remove it from Housing Benefit.

Contact us

For more details about our opening hours and how to contact us, go to Merton Benefits Service contact page.

See also