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The Capping Of Benefits

Posted by National Editor from National - Published on 07/10/2013 at 15:19
0 comments » - Tagged as People, Topical

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Yn Gymraeg // Welsh version

This series of articles looks at the effects of Welfare Reform on young people. There is so much information out there that it is impossible to condense it all into one article, however if you have any questions please talk to MEIC - they are waiting for your call, text or instant message all day every day. If you have an experience with the benefit cap to share, please comment below.

Welfare Reform: The Benefit Cap

As part of Welfare Reform, the benefit cap was introduced in phases beginning April this year. The Government says: "The aim of the policy is to achieve long-term positive behavioural effects through changed attitudes to welfare, responsible life choices and strong work incentives."

Local authorities are delivering the cap until Universal Credit takes over, which will be by 2017. The benefit cap sets a limit on welfare payments, so that the total amount of benefits that can be received by any individual or family will be limited to a maximum amount.

"We believe the benefits cap is unfair and will push thousands of families further into poverty. The reason the benefits bill has risen is because of the rising cost of accommodation in the private rented sector, compounded by low wages and the long-standing shortage of affordable and social housing."  Shelter Cymru

The Cap

The limit on total weekly benefits are:

  • £500 per week for couples / lone parents
  • £350 per week for single people

Housing benefit counts towards the maximum amount of benefit that can be paid and will be reduced to prevent the total benefits received going above these limits.

Which Benefits Are Included In The Cap?

The following benefits are included when working out whether your total benefit income is more than the cap:

  • Bereavement Allowance
  • Carer’s Allowance
  • Child Benefit
  • Child Tax Credit
  • Employment and Support Allowance (unless you get the support component)
  • Guardian’s Allowance
  • Housing Benefit
  • Incapacity Benefit
  • Income Support
  • Jobseeker’s Allowance
  • Maternity Allowance
  • Severe Disablement Allowance
  • Widowed Parent's Allowance
  • Widowed Mother's Allowance
  • Widow's Pension

Which Benefits Aren't Included?

  • Bereavement Payment
  • Discretionary Housing Payment
  • Help with Council Tax (for example from your local council’s support scheme)
  • Pension Credit
  • Residency order payments
  • Social Fund payments (for example Budgeting Loans, Cold Weather Payments, Funeral Payments)
  • Short Term Advances while you wait for your first benefit payment
  • State Retirement Pension
  • Winter Fuel Payment
  • one-off payments made by your local authority to help you out in a crisis
  • non-cash benefits, for example, free school meals
  • Statutory Pay (for example Sick Pay, Maternity Pay, Paternity Pay or Adoption Pay)

Advice For Younger People

  • Single people are at far less risk according to the Government, representing 10% of the total affected
  • Part-time work will reduce benefit and and minimise the cap effect
  • Only working age people (16+) are affected, if you are below that age you will be okay
  • Focus on exemptions: do you reach the Working Tax Credit criteria?

Not sure where you stand? Use this Benefit Cap Calculator.

SOURCES
Shelter Cymru
The Money Advice Service
Youth Access

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