The Benefit Cap: Limits and Exemptions

The benefit cap is a limit on how much you can receive in benefits if you and your partner are of working age but are not working. It is set by the UK government, and it is not usually applied if you are over Pension Credit age¹.

The cap is £14,753 a year for a single person without children, and £22,020 a year for couples and households with children⁴. In Greater London the figure for a single adult household without children is £16,967 a year⁶. If the benefits that count add up to more than the cap, your Housing Benefit or Universal Credit is reduced until you are brought back within it⁷.

The cap does not apply to everyone. If you or your partner get Carer's Allowance, or a disability benefit such as Personal Independence Payment, you are exempt⁸. So are households where a child gets Disability Living Allowance or Child Disability Payment¹⁰. Working enough hours to earn £793 a month also takes you out of the cap, and there is a nine-month grace period if your earnings drop after you have been exempt⁷.

What the benefit cap is and who it applies to

The cap applies to most people under State Pension age. It is a limit on the total amount of certain benefits a household can receive, and it is set by the UK government rather than by your council or jobcentre¹. It is not usually applied if you are over Pension Credit age, and couples over pension credit age are exempt from most benefit restrictions, including the cap¹.

The cap is worked out on your household, not on you alone. If you have a partner, your benefits are added together and measured against one limit. The amount you are over the cap is then taken off your benefit award⁷.

The cap has been part of the benefits system since 2013, and the exemptions have been widened since then. Carers have been exempt since November 2016¹⁴. The principle behind the exemptions is that households with a recognised extra cost, or with someone who cannot be expected to work, should not have their benefits limited in this way¹⁵.

Which benefits count towards the cap

Not every benefit is counted. The cap looks at a specific list of benefits, and only those are added up to see whether you are over the limit¹⁶.

The benefits included are:

• Housing Benefit
• Child Benefit
• Child Tax Credit
• Jobseeker's Allowance
• Income Support
• Incapacity Benefit
• Employment and Support Allowance, except when you are in the support group
• Maternity Allowance
• Severe Disablement Allowance
• Widowed Parent's Allowance and Bereavement Allowance
• Universal Credit

Employment and Support Allowance is included unless you are in the support group, in which case the cap does not apply to you at all¹⁶. One-off benefit payments, such as budgeting loans, are not taken into account¹⁹. That matters because a Budgeting Loan is money borrowed against future Universal Credit and repaid from your award, so it is not treated as benefit income for the cap¹⁹.

Exemptions: disability benefits and the limited capability for work element

The largest group of exemptions covers disability and health. If you, your partner or a child who lives with you gets one of a list of disability benefits, the cap does not apply⁸.

The benefits that create an exemption include:

• Disability Living Allowance
• Child Disability Payment
• Personal Independence Payment
• Adult Disability Payment
• Attendance Allowance
• Pension Age Disability Payment
• Constant Attendance Allowance
• Industrial Injuries Disablement Benefit
• Armed Forces Independence Payment
• Employment and Support Allowance with a support component
• The limited capability for work and work-related activity element of Universal Credit

The exemption also applies if you have limited capability for work-related activity, or if you receive Industrial Injuries Disablement Benefit, Attendance Allowance or a War Pension⁴. If you are claiming a disability benefit, receive the limited capability for work element of Universal Credit, or are in the support group for ESA, you are exempt²¹.

There is a limit to this. If a disabled child leaves your Housing Benefit or Universal Credit claim because they move into a residential setting, the exemption can be lost, although it may still apply if you are receiving Carer's Allowance or the carer's element of Universal Credit²².

Carers, Guardian's Allowance and pension age

Carers are exempt in their own right. If you or your partner qualify for Carer's Allowance, you are exempt from the benefit cap²³. The same applies if you receive Carer Support Payment in Scotland, or the underlying entitlement to Carer's Allowance, or a Carer Element within Universal Credit²⁴. Receipt of Carer Support Payment by the claimant, the claimant's partner, or a responsible young person is written into the regulations as an exception to the cap²⁷.

If you or your partner receive Guardian's Allowance, you are also exempt⁶. And if you have a dependent child who gets Disability Living Allowance, Personal Independence Payment, Child Disability Payment or Adult Disability Payment, the household is exempt¹⁰.

Pension age matters too. The cap applies to most people under State Pension age, and is not usually applied if you are over Pension Credit age¹. Couples over pension credit age are exempt from most benefit restrictions, including the cap¹³.

Working and earning £793 a month: the earnings exemption and 9-month grace period

Earning enough from work takes you out of the cap. The threshold is £793 a month⁷. Other guidance puts the figure at £881.23 a month after tax and National Insurance, and at £846 a month for Universal Credit households with earnings¹¹. The documents give different figures for the same rule, and the difference reflects how the threshold is measured: gross earnings against net earnings, and the point at which the exemption is applied.

There is also a grace period. If you stop working or your earnings go down, you can keep the exemption for up to nine months, provided you were earning at least £793 a month in the 12 months before. That threshold was £722 up to 7 April 2024 and is £793 from 8 April 2024⁷.

How your Housing Benefit or Universal Credit is reduced

The cap is applied by reducing your Universal Credit, or your Housing Benefit if you do not claim Universal Credit²⁹. If you receive more than the cap allows, your Housing Benefit or Universal Credit is reduced until you are brought back within it⁷. The extra you receive is deducted from either your housing benefit or your Universal Credit payments¹⁰.

If you are claiming Housing Benefit, the amount you receive each week is reduced to the cap amount³⁰. If you are on Universal Credit, the reduction comes off your award, and your housing element can be reduced for several reasons, including income from work, non-dependants, the bedroom tax, or the benefit cap³¹.

The reduction is worked out automatically. You do not apply for the cap to be taken off, and you do not apply for it to be applied. If your circumstances change, the amount taken off changes with them⁷.

Help with rent if the cap leaves you short

If the cap leaves you short of rent, there are two main routes. The first is a Discretionary Housing Payment from your council. It can cover some or all of the rent that is not covered by your benefits, and it can also help with tenancy deposits and rent in advance, moving costs, and rent arrears caused by a benefits shortfall³³.

The second is exempt accommodation. If you live in supported accommodation and receive more than minimal care, support and supervision, you are exempt from the benefit cap and from the under occupation rules. This is because that accommodation is usually more expensive to rent due to the care and support provided³⁵.

If you are behind on rent, free and impartial help is available. Shelter England, Shelter Scotland, Shelter Cymru and National Debtline all give free advice, and your council's housing options team can tell you what local help exists⁷.

Checking your own figure and challenging a decision

You can use the government's online benefit cap calculator to get an estimate of how much your benefit might be reduced⁷. Free, independent benefit calculators and advisers can also check the figure for you²⁷.

If you think the cap has been applied wrongly, or an exemption has been missed, you can ask for the decision to be looked at again. The first step is a mandatory reconsideration, and if that does not change the outcome you can appeal to a tribunal³¹.