Important benefit changes
Overall Benefit Cap (OBC)
There is a limit on the total amount of welfare benefits that working age households can receive and this is called the overall benefit cap (OBC). The cap applies to households in receipt of Housing Benefit or Universal Credit unless exempt.
- For couples, families and single parents, the total amount of specified welfare benefits that could be received was £500 per week.
- For single people, the total amount of specified welfare benefits that could be received was £350 per week.
Unless you were exempt, if your household received more than the above amount in total for specified welfare benefits, your Housing Benefit payments, or where you were in receipt of Universal Credit, your Universal Credit payments were reduced by the amount that your total benefits exceeded the cap.
Following the Government’s summer 2015 budget, the cap limits have reduced. For residents already subject to the benefit cap under the former limits outlined above, the change applied from 7 November 2016. For residents that will be subject to the benefit cap for the first time due to the reduced limits outlined below, the changes are currently scheduled to apply from 23 January 2017 (or a week either side of this date) based upon the most recent Department for Work and Pensions (DWP) advice.
- For couples, families and single parents, the total amount of specified welfare benefits that can be received is £442.31 per week
- For single people the total amount of welfare benefits that can be received is £296.35 per week.
Unless you are exempt, if your household receives more than the above amount in total for specified welfare benefits, your Housing Benefit payments, or where you are in receipt of Universal Credit, your Universal Credit payments will be reduced by the amount that your total benefits exceed the cap.
Which benefits are counted towards the benefit cap?
If you receive any of the benefits listed below, the income your household receives from these will count towards the benefit cap.
- Bereavement allowance
- Child benefit
- Child tax credit
- Employment and support allowance (except where it is paid with the support component)
- Housing benefit
- Incapacity benefit
- Income support
- Jobseeker's allowance
- Maternity allowance
- Severe disablement allowance
- Widowed parent's allowance
- Widowed mother's allowance
- Widow's pension
Are there any exemptions from the benefit cap?
The benefit cap will not apply if you or your partner, as appropriate, qualify for any of the following benefits.
- Working tax credit (you will need work for at least 16 hours per week if you are a single parent, 24 hours per week between you if you are in a couple with one of you working at least 16 hours per week or 30 hours if you are a single person)
- Attendance allowance
- Guardian’s Allowance
- Carer’s Allowance
- Disability living allowance*
- Personal independence payment*
- The support component of main phase employment and support allowance
- Industrial injuries benefits (and equivalent payments as part of a war disablement pension or the armed forces compensation scheme)
- War widow or war widower's pension
* Where these payments are made to a child or young person living in your home, the benefit cap will also not apply.
You will also be exempt from the benefit cap if disability living allowance, personal independence payment, attendance allowance or war pension is not currently being paid to you or your partner as appropriate because of being in hospital or care home.
Additionally, the benefit cap will not apply for a period of 39 weeks starting from the day after you or your partner’s last day of work provided that for at least 50 of the 52 weeks prior to the last day of work, you or your partner were engaged in paid work and were not entitled to Job Seekers Allowance, Employment Support Allowance or Income Support; and in the last week of work, you or your partner worked at least 16 hours.
For the above conditions, maternity, paternity or adoption leave or receipt of statutory sick pay count as being in work.
What happens if the benefit cap reduces my entitlement to Housing Benefit to nil or less than the minimum amount of Housing Benefit permitted by law of £0.50 per week?
If this situation should occur, you will be treated as being entitled to Housing Benefit of 50 pence per week (i.e. £26.00 per annum).
This will enable you to apply for a Discretionary Housing Payment (DHP) to seek short term assistance with your Housing costs, although awards are only made in certain situations.
How to apply for DHP
What are the options available to me?
- Find work to qualify for Working Tax Credit – Get help looking for employment and getting training and skills which includes a new course specifically designed to help you take control of your money and manage the benefit cap.
- Make up any shortfall in your rent from other money received.
- Find somewhere more affordable to live or negotiate a rent reduction with your landlord – Get private tenant advice and help finding a home
- Apply for one of the benefits referred to above that will exempt you from the cap.
Where can I find out further information about the cap?
You can get more information about the cap from:
Calculate your benefit entitlement
A benefit calculator is now available to help you determine whether you may be entitled to Housing Benefit and/or Council Tax Support and the potential amount.
If you find that you may be entitled, you will be able to access the benefit claim form directly from the ‘Results’ page of the calculator.
The calculator will also permit you to assess the impact of increasing your working hours and/or pay on your entitlement.