Since 15 July 2013 a limit on the total amount of benefits that working-age claimants can receive has been gradually introduced across Scotland, this is known as the 'Benefit Cap'.
The cap is:
- £500 per week for couples and lone parents
- £350 per week for single adults
The cap applies to the combined income from:
- Out-of-work benefits (Jobseeker's Allowance, Income Support, and Employment and Support Allowance, except where the Support Component is in payment);
- Housing Benefit (HB);
- Child Benefit and Child Tax Credit;
- Universal Credit (from October 2013); and
- Other benefits such as Carer's Allowance and Maternity Allowance
The cap does not apply where someone in the household:
- Obtains work and becomes entitled to Working Tax Credit;
- Is in receipt of War Widows or Widowers Pension, Disability Living Allowance (Personal Independence Payment from April 2013), Attendance Allowance, Constant Attendance Allowance or the support component of Employment Support Allowance, Industrial Injuries Benefits (and equivalent war disablement pensions and payments under the Armed Forces Compensation Scheme).
Claimants who have been in employment for 52 weeks or more when they claim benefit are exempt from the cap for a grace period of up to 39 weeks.
How the Benefit Cap affects Housing Benefit
Where the combined income is more than the cap, Housing Benefit entitlement is reduced by the amount of excess income. As a result some people could lose all their Housing Benefit, except for a nominal amount of 50p which will continue to be paid should the amount of excess income exceed the amount of Housing Benefit awarded. No deductions are made to other benefits because of the cap.
Eventually, the cap will affect entitlement to Universal Credit. This means that even if you are not currently affected by the cap because you don't get Housing Benefit, the cap could affect you if you start receiving Universal Credit.
If you have received a letter from the Department for Work and Pensions (DWP) warning that your benefits may be reduced, or you are worried that you could be affected by the cap, you should seek advice to enable you to:
- draw up a budget, reduce spending and focus on rent payments;
- make up any shortfall between Housing Benefit and rent by using other income;
- consider moving somewhere cheaper;
- find a job.
Help with paying rent after the introduction of the benefit cap
If you are having difficulty paying the balance of rent due after the cap has been applied, and if you meet the criteria, you can apply for a Discretionary Housing Payment (DHP).
If you have a query about the Benefit Cap please contact the Department for Work and Pensions (DWP) on 0845 6057064.
If you need clarification, help and advice is available from the Citizen's Advice Bureau, 01506 432977.