Get advice if you have had a letter from DWP about the benefit cap
The letter will cause concern to people receiving it. Lambeth Council is providing people with advice and support if they are affected by the new cap. The Council’s Housing Options team will be able to:
- Advise tenants about how the cap is applied and assess whether an exemption is possible or already exist
- Advise tenants how to manage small shortfalls created by the cap being applied
- Signpost tenants to money advice and other support services such as help to get back to work
- Negotiate with the landlord to reduce the rents (in the private rented sector)Help the tenant to move to alternative accommodation if they are statutorily homeless.
The contact details for those affected are: 020 7926 4200 (ask for Housing Options) or e-mail
You can also contact Lambeth advice agencies for advice but DASL recommends that you contact Housing Options given that the Council will have statutory housing responsibility for the majority of affected households.
The new Welfare Reform Act empowers the government to put a cap on the total benefits an individual or couple is entitled to receive. This cap will be introduced in April 2013 and will be set at the level of an average working household’s net earnings – currently expected to be £500 per week for families and £350 per week for single people without children. These limits will be set in regulations.
The cap will apply to the combined income of a household derived from the main out-of-work benefits, plus child benefit, housing benefit and child tax credits. One-off payments, childcare payments and Council Tax Benefit will not be included within the cap so do not count towards this weekly limit.
Claimants will not be capped where someone in the household (claimant, partner or any children they are responsible for and who live with them) receives any of the following:
- Disability Living Allowance
- Personal Independence Payment (from April 2013)
- Attendance Allowance
- Working Tax Credit
- The support component of Employment Support Allowance
- Industrial Industries Benefits
- War Widows and War Widowers Pension
There is some concern that the data that DWP are using to determine who is subject to the cap, and therefore who to write to, is not accurate and includes people who would be exempt for some of the reasons set out above. It is important that anyone seeking advice is reminded about the exemptions that exist.
The majority of those affected by the cap live in Greater London, which points to the overwhelming likelihood that it is housing costs paid through Housing Benefit that will be the main cause of claimants receiving benefits that take them over the weekly cap.
In the first instance the cap will be administered jointly by DWP and Local Authorities and any reductions that need to be applied because of the cap will be deducted from Housing Benefit payments. In the long term, however, the payment and cap will form part of the new Universal Credit system.
In Lambeth, DWP estimates that we currently have around 750 claimants who will be subject to the benefit cap losing from £1 to £700 a week depending on HB levels and family size. The average weekly shortfall in Lambeth created by the cap is £98 per week. It is extremely unlikely in such cases that families and individuals will be able to meet this shortfall out of their personal benefits so they will be forced to start work and work enough hours to qualify for Working Tax Credit (thus becoming exempt), to try and claim another of the exempting benefits (eg: DLA) or to move to cheaper/smaller accommodation which will lower housing costs and mean that the HB payable to the family is reduced to below the cap levels. Obviously there is unlikely to be sufficient cheaper accommodation in Lambeth so families will be forced to move further afield to find something affordable or rent a smaller property in Lambeth which will cause knock-on concerns around overcrowding.