Updated 27 March 2013

Benefit cap

The benefit cap is a feature of the Welfare Reform Bill that received Royal Assent on the 8 March 2012.

From April 2013 a cap will be introduced on the total amount of benefit that working age people can receive. This will mean that workless households should no longer receive more in benefits than the average earnings of working households.

In the first instance the cap will be administered jointly by DWP and local authorities through deductions from Housing Benefit payments. In the longer term it will form part of the new Universal Credit system.

Implementation

The benefit cap will be implemented from April 2013, starting in four local authorities in London – Bromley, Croydon, Enfield and Haringey. These were chosen as London has the highest percentage of potential benefit cap claimants and a diverse cross section of residents. This will be a phased roll-out with the remaining local authorities implementing the cap from the 15 July 2013, with all appropriate households capped by the end September 2013.

A phased roll-out allows us to:

• test our systems and processes end to end in a controlled live environment
• ensure the supporting products and services for both staff and claimants are effective
• ensure there is a measured approach to rolling out the cap to affected households
• build capacity to learn and respond to issues raised in the initial phase of rollout to inform national rollout.

Latest updates

26 March 2013

• Benefit cap – frequently asked questions for local authorities (112KB)

1 February 2013

• General Information Bulletin G12/2012 – includes details on the phased roll-out of the benefit cap

11 December 2012

• HB/CTB Urgent Bulletin U5/2012 (24KB) – includes an announcement about Supported Exempt Accommodation and the benefit cap.

21 November 2012

• General Information Bulletin G11/2012 (39KB) – gives information on the next direct mail exercise and LA data scans due in January 2013.

21 September 2012

• General Information Bulletin HB/CTB G9/2012 (45KB) gives more information about the direct mail exercise commencing in September 2012 and the associated LA scans. (Bulletin added to site 23 November 2012).

17 August 2012

• General Information Bulletin HB/CTB G8/2012 (43KB) includes details of visits made to local authorities by the project team and local Jobcentre Plus representatives. It highlights a number of innovative approaches being adopted that you may find useful. (Bulletin added to site 23 November 2012).

19 July 2012

• General Information Bulletin HB/CTB G6/2012 (48KB) gives information about the online calculator, plans for further scans and claimant letters and an update on the design for April 2013.

28 May 2012

An online calculator is available for claimants to get an estimate of how their Housing Benefit might be affected. Claimants will need to be aware which benefits they receive and how much their award is for, in order to understand how the cap might affect them. They can get this information from their award letters or by contacting the departments that pay their benefits.

• Benefit cap calculator (Directgov)

22 May 2012

• General Information Bulletin HB/CTB G5/2012 addresses issues raised by local authorities with the benefit cap data scan received.

16 May 2012

• General Information Bulletin HB/CTB G4/2012 (44KB) includes information for HB/CTB staff about the benefit cap briefing pack sent to all local authorities and the action required

23 March 2012

• General Information Bulletin HB/CTB G3/2012 (57KB)  includes information for HB/CTB staff about the benefit cap.

21 March 2012

Letter issued to local authority Chief Executives on Welfare Reform:

• Planning for Welfare Reform from April 2013 (England) (54KB)
• Planning for Welfare Reform from April 2013 (Scotland) (39KB)
• Planning for Welfare Reform from April 2013 (Wales) (38KB)

The benefit cap and local authorities

Local authorities need to know about the benefit cap because

• It will be administered through a reduction in Housing Benefit;
• In April 2012, DWP are writing to claimants potentially affected by the cap. Some of these will wish to discuss their housing options and will be directed to their local authority Housing Benefit department.

DWP is currently working with local authorities to produce the appropriate guidance and instructions for administering the cap and the impact it may have. These will be made available on this page when they are ready.  

The benefit cap and local authority engagement

DWP has been liaising with the regular LA forums which focus on Housing Benefit, namely

• the Local Authority Association Steering Group, and
• the Practitioners’ Operational Group.

To ensure we are aware of the full impacts for local authorities, the Department is widening its discussions to include those responsible for issues such as homelessness and social care.

Further information

• Benefit cap – frequently asked questions for local authorities (112KB) – March 2013
• Benefit cap factsheet (177KB) updated March 2013
• Impact Assessment for the Household Benefit Cap (101KB)
• Ad hoc statistics on Jobcentre Plus activity regarding claimants who have been identified as potentially impacted by the benefit cap (22KB)