Understanding the benefit cap

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Q: I have received a letter saying that I will be affected by the benefit cap, what is this?

A: From May 31, 2016 there has been a limit on the total amount of benefit you can get if you’re working age. This is called the benefit cap. The cap was reduced further on November 7, 2016

At first, the benefit cap will only affect you if you’re getting Housing Benefit. 

If the cap affects you, your Housing Benefit will go down.

No deductions will be made to your other benefits because of the cap.

This means that if you don’t receive Housing Benefit, your benefits can’t be capped.

However, eventually, the cap will be applied by making deductions from payments of Universal Credit. T

his means that even if you’re not currently affected by the cap because you don’t get Housing Benefit, the cap could affect you if you start getting Universal Credit.

How much is the cap?

If you’re getting Housing Benefit, from November 7, 2016, the cap is reduced to:

£384.62 a week if you’re a couple - with or without dependent children

£384.62 a week if you’re a lone parent with dependent children

£257.69 a week if you’re a single person without children.

If you don’t receive enough Housing Benefit, the cap won’t be applied in full.

However, some people could lose all their Housing Benefit, except for a nominal amount of 50p which will continue to be paid.

Will anyone be exempt from the cap?

Some people are exempt from the benefit cap.

This means your benefit won’t be capped, even if your benefit income is above the limit of the cap.

The benefit cap won’t apply to your household if:

you or your partner work enough hours to qualify for Working Tax Credit, even if you don’t get it

you’ve reached the age for getting Pension Credit, although you may not be exempt if you’re a mixed age couple

you, your partner or any children who are living with you and who you’re responsible for get certain benefits for sickness, disability or caring.

you or your partner had been in employment for at least 50 weeks out of the 52 weeks before your last day of work.

If this is the case, you’ll be exempt from the cap for up to 39 weeks from the date your job ended

Which benefits are included in the cap?

The cap will apply to your household income from most benefits, including Child Tax Credit.

However, there are some benefits which the cap won’t apply to. For further information on this please contact your local Citizens Advice

How will you know if you’re affected?

If your household is affected by the benefit cap, the Housing Executive will write to you to tell you that your Housing Benefit will go down. The letter will tell you how they calculated how much your Housing Benefit should reduce. If you do not agree, you can ask for them to review their calculation.

What help can you get?

If you are getting one of the benefits included in the cap on the date the Benefit Cap is introduced, you may be entitled to a supplementary payment for up to four years to make up for any financial loss.

You won’t need to apply to receive a Supplementary Payment. The Department for Communities will identify if you are eligible and will make payments to cover any loss of Housing Benefit.

How are the payments made?

Supplementary Payments will be made every four weeks in arrears in the same way your Housing Benefit is paid.

However your landlord or the letting agent has to be on the Landlord Register to get the Supplementary Payment. Otherwise it will go to the person claiming Housing Benefit.

Other help

If you are affected by the Benefit Cap and are not eligible for a Supplementary Payment, you can apply for a Discretionary Housing Payment to make up for the reduction in your Housing Benefit.

Get free, confidential and independent advice from your nearest Citizens Advice at www.citizensadvice.co.uk or for further information go to www.citizensadvice.org.uk/nireland