Universal credit: Benefit cap

With the introduction of Universal Credit comes the Benefit Cap, as part of the Government’s Welfare Reform agenda. The benefit cap basically means that there is an upper limit on the amount of benefit that working age claimants who are out of work can receive.

What is the benefit cap?
How much is it?
What benefits count towards the cap?
How does it work with Universal Credit?
Northern Ireland
More detailed information

What is the benefit cap?

From April 2013 a cap was gradually introduced on the total amount of benefit that working-age claimants can receive, with the intention that households on out of work benefits do not receive more in benefit than the average weekly wage, after tax and national insurance.

Initially the cap was administered by local authorities via housing benefit and was rolled out gradually to various local authorities between April and end September 2013.  

Since October 2013 it has also applied to all new claims to Universal Credit including those migrated from existing benefits. There is a Benefits Cap calculator available on the GOV.UK website

The benefit cap was introduced in Northern Ireland from 31 May 2016.

How much is it?

The current cap is:

Outside of Greater London Borough -

If you live in a Greater London Borough

Before the 7 November 2016, the cap was higher. Between 7 November 2016 and 12 December 2016 the new cap was phased in. The total level of entitlement to welfare benefits was limited to £500 a week for couple and lone parent households and £350 a week for single households. For Universal Credit these amounts were converted to monthly figures to match Universal Credit’s monthly assessment period. For couples and lone parent households the cap was £2167 and for single adults it was £1517 per month.

What benefits count towards the cap?

The benefits currently taken into account in calculating the cap are:

The cap does not apply if anyone in the household is receiving WTC, Guardian's Allowance or certain disability benefits. See the GOV.UK website for a full list of these benefits.      

How does it work with Universal Credit?

The benefit cap is relevant to the final stage of calculating entitlement to UC. Firstly, the amount of excess must be calculated. This is the amount that the UC entitlement (plus any of the other benefits listed above) exceeds the benefit cap minus any amount included in the award for childcare costs. This ensures that childcare costs are protected from the cap. No reduction is applied if the childcare costs exceed the excess amount.

There are some other exceptions to the cap. The cap does not apply where:

Prior to 1 April 2017, the relevant threshold was a fixed amount of £430. For any assessment period beginning on or after 1 April 2017, instead of having a fixed level of net income that exempts a claimant from the cap it has been changed to be based on the monthly amount a person earns by working 16 hours a week at the national living wage – which is £520 a month currently.

The earnings threshold is set by reference to the living wage rate which applies to those aged 25 or over even if the claimant is under 25.

Northern Ireland

The cap was introduced in Northern Ireland from 31 May 2016.

In Northern Ireland, ‘Welfare Supplementary Payments' can be paid to any households with children who have their Housing Benefit reduced due to the benefit cap. The payments should match the amount by which their Housing Benefit is reduced, effectively meaning they are no worse off. These payments will remain available until 31st March 2020.

More information

Last reviewed/updated 20 April 2017