All over the country people are starting to feel the impact of the Benefits Cap. So here is a quick guide on the process and how to help parents facing a loss of benefits.
Benefits Cap – Recap
The Cap is set at £500 for couples and lone parents.
It applies to the combined income from the main out-of-work benefits like JSA and Income Support, plus Housing Benefit, Child Benefit and Child Tax Credit – for a full list see below.
If you get Working Tax Credit you are not affected by the Cap.
There are also exemptions for those entitled to a range of benefits including Disability Living Allowance, Personal Independence Payment, Attendance Allowance, and the support component of ESA.
Claimants who have been in employment for 52 weeks or more when they claim benefit will be exempt from the cap for a grace period of up to 39 weeks.
Benefits that count towards the cap
- Bereavement Allowance
- Carer’s Allowance
- Child Benefit
- Child Tax Credit
- Employment and Support Allowance (except where it is paid with the support component)
- Guardian’s Allowance•Housing Benefit whether paid direct to you or to your landlord (but not including Housing Benefit paid for Supported Exempt Accommodation)
- Incapacity Benefit
- Income Support
- Jobseeker’s Allowance
- Maternity Allowance
- Severe Disablement Allowance
- Widowed Parent’s Allowance
- Widowed Mother’s Allowance
- Widow’s Pension, including the Age-Related component
Parents usually find their benefits capped because they are working insufficient hours, or they have expensive housing and/or have a larger family. Two key approaches are to look at increasing working income and reducing housing costs.
Moving in to work
Lone parents will be able to avoid the Cap if they are claiming Working Tax Credit – which kicks in at 16 hours a week. For couples one partner will need to be doing more than 24 hours.
Identifying part time and flexible working will be the key here. But parents may also need to improve their skills, and boost their confidence. We are about to start work on a range of projects to deliver this type of help. Our aim will be to support parents to find a balanced job where they can support their family practically, emotionally and financially.
Reducing Housing Costs
For many people, especially those in urban areas and the South East the cost of private rented accommodation is the problem. The government has encouraged people to renegotiate their rent and move to cheaper housing, but this has to be based on individual circumstances.