24 February 2017
Changes announced to Benefit Cap earnings threshold for UC claimants
New regulations have been published today that change the earnings threshold in the benefit cap for UC claimants.
The benefit cap is a cap on the total amount of benefit that working-age claimants can receive. However, the cap does not currently apply to UC claimants where:
- Net earned income (combined income if part of a couple) in a monthly assessment period is £430 or more, or
- The claimant is within a nine-month grace period. A grace period occurs where the claimants earnings (or combined earnings) from work are less than £430 a month but immediately before this applies their earnings were at least £430 a month for the preceding 12 months. A grace period also occurs where before the current period of entitlement to UC the claimant stopped work and immediately before stopping work their earnings were at least £430 a month for the preceding 12 months.
From 1 April 2017, instead of having a fixed level of net income that exempts a claimant from the cap (currently £430) it will instead be based on the monthly amount a person would earn whilst working 16 hours per week at the National Living Wage (which will be £7.50 an hour from April 2017).
We will update our benefit cap information in the coming weeks ahead of the start of the 2017/18 tax year.
You can view the regulations, which also make other smaller consequential changes, here.
UPDATE 10 MARCH 2017: See our blog post on 10 March for links to the latest DWP guidance and more information on when this change takes effect.