Benefit Cap explained for Landlords*
What is the Benefit Cap?
The benefit cap is a reform to welfare benefits to limit the sum received by claimants. It limits the maximum sum that a couple with or without a child or a single parent can receive from a combination of benefits to £26,000 per year (£500 per week) and the maximum sum a single person can receive to**£18,200 (£350 per week). These sums are based on the average income of similar households in employment. The rationale is that recipients of welfare benefits should not be financially better off than households in employment.
What age groups are affected?
The benefit cap affects persons of working age. It does not affect persons under the age of 16, men above the age of 65 and women above the age of 61. The upper ages will be changing in the near future.
What benefits are affected?
Households not in work or on a low income will get one or more of the benefits listed below. The total sum from all the benefits they receive will be capped at £350 per week if they are single person and £500 per week if they are a couple with or without a child. The benefits are:-
·*********Bereavement Allowance
·*********Carer’s Allowance
·*********Child Benefit
·*********Child Tax Credit
·*********Employment & Support Allowance (unless the recipient gets the support component)
·*********Guardians Allowance
·*********Housing Benefit
·*********Incapacity Benefit
·*********Income Support
·*********Jobseeker’s Allowance
·*********Maternity Allowance
·*********Severe Disablement Allowance
·*********Widowed Parent’s Allowance (widowed Mother’s Allowance or Widow’s Pension starting before 9/04/2001)
Where a member of a household receives one of the following benefits the cap will not apply:-
·*********Attendance Allowance
·*********Disability Living Allowance
·*********Employment Support Allowance support component
·*********Industrial Injuries Benefit
·*********Personal Independence Payment
·*********War Disablement Pension
·*********Certain payments from the Armed Forces Compensation Payments Scheme
·*********Working tax credit
The cap does not apply:-
******·*********To war widow and widowers
·*********For 39 weeks (nearly 10 months) where someone was working and entitled or in receipt of working tax credit** but has lost their job
·*********Where someone is in receipt or entitled to working tax credit
When does the cap take effect?
There are 3 main dates for the cap to take effect.
15th*April 2013 for the boroughs of Enfield, Haringey, Croydon and Bromley
15th*July 2013 for boroughs with 275 household or less affected by the cap
12th*August 2013 for boroughs with 276 households or more are affected. This includes the majority of the London boroughs.
If the borough a property is in is listed below the cap will take effect on 12th*August 2013. If the borough is not in the list below and is not one of the four London boroughs where the cap was piloted it will take effect on 15th*July 2013.
Boroughs where the cap will take effect on 12th*August 2013 are
Barking & Dagenham*
Ealing,
Islington
Redbridge
Barnet*
Edinburg
Kensington and Chelsea
Sandwell
Bexley
Glasgow
Lambeth
Sheffield
Birmingham
Greenwich
Leeds
Slough
Bradford
Hackney
Leicester
Southwark
Brent,
Hammersmith and Fulham
Lewisham
Tower Hamlets
Brighton and Hove***************
Harrow
Liverpool
Walsall
BristolHavering
Manchester
Waltham Forest
CamdenHillingdon
Newham
Wandsworth
Cardiff
Hounslow
Nottingham
Westminister
The date of 12th*August 2013 may be subject to change but the benefit cap should be fully implemented by September 2013.
What to do about the benefit cap?
See second post below.........
What is the Benefit Cap?
The benefit cap is a reform to welfare benefits to limit the sum received by claimants. It limits the maximum sum that a couple with or without a child or a single parent can receive from a combination of benefits to £26,000 per year (£500 per week) and the maximum sum a single person can receive to**£18,200 (£350 per week). These sums are based on the average income of similar households in employment. The rationale is that recipients of welfare benefits should not be financially better off than households in employment.
What age groups are affected?
The benefit cap affects persons of working age. It does not affect persons under the age of 16, men above the age of 65 and women above the age of 61. The upper ages will be changing in the near future.
What benefits are affected?
Households not in work or on a low income will get one or more of the benefits listed below. The total sum from all the benefits they receive will be capped at £350 per week if they are single person and £500 per week if they are a couple with or without a child. The benefits are:-
·*********Bereavement Allowance
·*********Carer’s Allowance
·*********Child Benefit
·*********Child Tax Credit
·*********Employment & Support Allowance (unless the recipient gets the support component)
·*********Guardians Allowance
·*********Housing Benefit
·*********Incapacity Benefit
·*********Income Support
·*********Jobseeker’s Allowance
·*********Maternity Allowance
·*********Severe Disablement Allowance
·*********Widowed Parent’s Allowance (widowed Mother’s Allowance or Widow’s Pension starting before 9/04/2001)
Where a member of a household receives one of the following benefits the cap will not apply:-
·*********Attendance Allowance
·*********Disability Living Allowance
·*********Employment Support Allowance support component
·*********Industrial Injuries Benefit
·*********Personal Independence Payment
·*********War Disablement Pension
·*********Certain payments from the Armed Forces Compensation Payments Scheme
·*********Working tax credit
The cap does not apply:-
******·*********To war widow and widowers
·*********For 39 weeks (nearly 10 months) where someone was working and entitled or in receipt of working tax credit** but has lost their job
·*********Where someone is in receipt or entitled to working tax credit
When does the cap take effect?
There are 3 main dates for the cap to take effect.
15th*April 2013 for the boroughs of Enfield, Haringey, Croydon and Bromley
15th*July 2013 for boroughs with 275 household or less affected by the cap
12th*August 2013 for boroughs with 276 households or more are affected. This includes the majority of the London boroughs.
If the borough a property is in is listed below the cap will take effect on 12th*August 2013. If the borough is not in the list below and is not one of the four London boroughs where the cap was piloted it will take effect on 15th*July 2013.
Boroughs where the cap will take effect on 12th*August 2013 are
Barking & Dagenham*
Ealing,
Islington
Redbridge
Barnet*
Edinburg
Kensington and Chelsea
Sandwell
Bexley
Glasgow
Lambeth
Sheffield
Birmingham
Greenwich
Leeds
Slough
Bradford
Hackney
Leicester
Southwark
Brent,
Hammersmith and Fulham
Lewisham
Tower Hamlets
Brighton and Hove***************
Harrow
Liverpool
Walsall
BristolHavering
Manchester
Waltham Forest
CamdenHillingdon
Newham
Wandsworth
Cardiff
Hounslow
Nottingham
Westminister
The date of 12th*August 2013 may be subject to change but the benefit cap should be fully implemented by September 2013.
What to do about the benefit cap?
See second post below.........