People receiving benefits from the Department for Work and Pensions (DWP) could see their payments effectively cut in the coming months, despite promises of a benefits raise in the Autumn Statement.
According to findings by the Child Poverty Action Group (CPAG), some people may be pushed beyond the threshold of the benefit cap, meaning they won't qualify for further benefits.
This would mean some people could be worse off due to the benefit cap.
As reported by The Independent, CPAG warned: “Increasing benefit rates and support with rent costs will make a difference to many families continuing to struggle with rising prices... but, sadly, these changes will provide absolutely no help to the over 85,000 households affected by the benefit cap, who will receive not one penny more. ”
So what exactly is the benefit cap and what changes are coming up?
What is the benefit cap?
The benefit cap is basically a limit on the total amount of benefits people can earn in the UK. As per the UK Gov website, the cap applies to:
- Universal Credit
- Bereavement Allowance
- Child Benefit
- Child Tax Credit
- Employment and Support 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 if you started getting it before April 9, 2001)
This cap usually applies to people over the age of 16 and below pension age. If your total amount of benefits exceeds the total amount outlined by the benefit cap, your benefits will be reduced.
However, some exemptions to the benefit cap rule exist, such as if you're receiving adult disability payments or armed forces compensation.
The benefit cap is determined depending on your location within or outside Greater London and if you have any dependents or are a couple.
How much is the benefit cap?
For people residing within Greater London, the current benefit cap is:
- If you’re in a couple: £486.98 per week and £2,110.25 per month.
- If you’re a single parent and your children live with you: £486.98 per week and £2,110.25 per month.
- If you’re a single adult: £326.26 per week and £1,413.92 per month.
The benefit cap for people outside of Greater London is:
- If you’re in a couple: £423.46 per week and £1,835 a month.
- If you’re a single parent and your children live with you: £423.46 per week and £1,835 per month.
- If you’re a single adult: £283.71 per week and £1,229.42 per month.
Is the benefit cap changing?
In 2022, Jeremy Hunt confirmed that the benefit cap was rising alongside benefit rates for 2023. However, there's been no news of the benefit cap being raised in 2024.
And that's actually what seems to be the problem.
From April 2024, the number of benefit payments such as Universal Credit is set to increase. Other benefit changes are also anticipated throughout 2024, as current inflation levels make things more expensive, so people need more support.
According to the UK Gov: "An estimated 19.5 million families and 39.6 million individuals in families in Great Britain in receipt of DWP and HMRC benefits will see an increase in their benefits."
However, if people cross the benefit cap threshold as a result of the upcoming benefit increase, then it means they simply don't get as much money.
How to get extra help with the benefit cap
If you're affected by the benefit cap, then you're advised by the Government to contact the DWP.
You can also reach out to your local council, where you may be eligible for discretionary support with things like housing payments.
The financial charity Turn2us also provides useful information for people who fear the benefit cap may impact them.
It is also possible to sometimes challenge benefit caps, but it depends on what kind of benefits you receive.
