Last phase of benefit cap rolls out

Published by Laura Whitcombe on 12 August 2013.
Last updated on 13 August 2013

Benefits

The final stage of the government's new benefit cap has launched, with the last 40 local councils now limiting welfare payments to £500 a week for couples and those with children, and £350 a week for single people.

Around 40,000 households will have their benefits cut as a result. Jobcentre Plus said it has already helped around 14,000 claimants identified as living in potentially capped households into work since April, when the cap was introduced in some regions.

It said that 34,500 people had accepted an offer of employment support.

Iain Duncan Smith, Work and Pensions Secretary, said: "The benefit cap is a major step forward in creating a welfare state that actively helps people get back on their own two feet, instead of providing payouts that are out of reach of the average hard-working family.

"Within the cap, there is a very clear incentive for people to work, as those claiming Working Tax Credit will be exempt and Universal Credit builds on this, ensuring claimants know they are better off in work than on benefits.

"It is clear the public support the benefit cap, as for too long the taxpayer has propped up a broken system. This government is returning common sense to the welfare state at last."

The councils rolling out the benefit cap today are those that have 276 or more households affected living in the local authority. Councils with fewer affected households introduced the cap in July.

Which benefits are capped?

The benefit cap applies to combined income from the main out-of-work benefits, including:

  • Jobseeker's Allowance
  • Income Support
  • Employment and Support Allowance
  • Housing Benefit
  • Child Benefit
  • Child Tax Credit
  • Carer's Allowance

The benefit cap will not affect households made up of those entitled to Working Tax Credit. Nor will it apply to those claiming:

  • Disability Living Allowance
  • Personal Independence Payment
  • Industrial Injuries Benefit
  • War Disablement Pension and the equivalent payments from the Armed Forces
  • Compensation Payments Scheme
  • Attendance Allowance
  • The support component of Employment and Support Allowance
  • War Widow's or Widower's Pension
  • Pension Credit

Those serving or who have served in the Armed Forces and their dependants will also be exempt from the cap.

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