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Benefit Cap Briefing

From April 2013, a cap will be introduced on the total amount of benefit that working-age

people can receive so that households on out-of-work benefits will broadly no longer

receive more in welfare payments than the average weekly wage for working households.

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. On its introduction in 2013, the cap will be set at 500 per week for couple and single

parent households; and at 350 per week for single adult households without children.

The cap will apply to the combined income from benefits including:

the main out-of-work benefits (J obseeker's Allowance, Income Support and

Employment & Support Allowance except where the Support Component is in

payment);

Universal Credit on its introduction

Housing Benefit

Child Benefit

Child Tax Credit, and

Other benefits such as Carer's Allowance

One-off payments, for example, Social Fund Loans and non-cash benefits, such as Free

School Meals, will not be included in the assessment of benefit income.

In recognition of their additional needs, all households* which include somebody who is

receiving Disability Living Allowance, Personal Independence Payment, Industrial Injuries

Benefit (and those receiving War Disablement Pension and the equivalent payments from

the Armed Forces Compensation Payments Scheme), Attendance Allowance or receiving

the support component of Employment Support Allowance will be exempt from the cap.

War widows and war widowers will also be exempt.

Households with a member who is entitled to Working Tax Credit will also be excluded

from the benefit cap. This will increase the incentive for people on out-of-work benefits tofind jobs because once they are in receipt of Working Tax Credit - or the earnings

equivalent under Universal Credit - their benefits will no longer be capped.

The benefit cap will apply from 15 April 2013 in Croydon, Bromley, Enfield and Haringey

Local Authority areas.

It will be implemented in all other Local Authorities from 15 J uly 2013. All households

identified as being appropriate to be capped will, in line with existing plans, be capped by

the end of September 2013.

In the first instance the benefit cap will be delivered by Local Authorities through Housing

Benefit payments. lnthe long-term it will be administered-as part oLthe new Universal

Credit system.

A grace period whereby the benefit cap will not be applied for 39 weeks will apply to those

who have been in work for the previous 12 months.

Housing Benefit (HB) paid to households in supported exempt accommodation (SEA) is

being disregarded from the benefit cap. The disregard will apply both to benefit cap cases

under HB from April 2013 and under Universal Credit (UC).

Support for affected claimants

J obcentre Plus has been contacting claimants potentially affected by the benefit cap since

May 2012 to ensure they receive the support they need to move them closer to

employment.

In May 2012 letters were sent to all those claimants identified at that time who may be

affected. Claimants that have been identified as potentially affected since May werewritten to in J uly 2012. A further letter was issued between 20 September and 5 October

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2012 to all claimants likely to be affected. These letters gave an estimate of the weeklyloss (in bandwidths of 50) to claimants whose benefits are more than the cap allows.

Between 6 and 8 February 2013, the Department sent out approximately 20,000 letters toall those potentially affected from 15 April and to newly identified cases, affected from 15

J uly 2013, which we have not written to previously. During March 2013, further letters willbe sent out to those affected outside of the four London boroughs to tell them the benefitcap will now apply to them from 15J uly 2013.

All letters will provide information about available employment support, benefit caphelpline and further options available to claimants to help mitigate the cap's impact.

A telephone helpline is available for claimants who have received a letter and have furtherquestions (Annex A). Helpline staff can answer frequently asked questions, offer claimantsthe opportunity to discuss employment support with their local J obcentre and signpostclaimants to their Local Authority if they have housing related questions.

From 28th May 2012 an online calculator has been available for claimants to check if thecap may apply to them (Annex A).

J obcentre Plus staff are contacting every claimant potentially affected by the benefit cap(unless they are already engaged with either a Work Programme or Work ChoiceProvider) to offer them the opportunity to discuss with an adviser what employment

support might be available to them. Employment support is also being offered byJ obcentre Plus partners, and claimants likely to be capped can also have early access tothe Work Programme

Where J obcentre Plus has been unable to contact claimants identified as being vulnerablethey will be visited by a DWP visiting officer.

Local authorities have been working closely with J obcentre Plus on the employment andskills agenda

We will provide additional funding for the Discretionary Housing Payments Scheme of upto 65million in 2013/14 and up to 35million in 2014/15. The Scheme allows LocalAuthorities to make additional payments to people entitled to Housing Benefit where theperson needs temporary help with housing costs.

Prior to the Benefit Cap being applied, DWP will be undertaking a 100% check oninformation drawn from claimant/household live system records. Once that check iscomplete the information will be shared with Housing Benefit teams so that they canaccurately implement the cap via a deduction from Housing Benefit. As such the data tocap all appropriate households will be sent over several weeks. DWP will continue towork with local authorities on the most appropriate ways to manage the schedule of

activity over that period.

* For the purposes of the benefit cap, a household or family unit refers to the benefit claimant, their partner (if they

have one) and any child or qualifying young person for whom that adult or couple are treated as responsible when

working out their Housing Benefit.

AnnexA

Benefit cap helpline number:

0845 6057064 ortextphone 0845 6088551 (for people with hearing or speech impairments).

The helpline is open Monday to Friday 8am to 6pm

Benefit cap online calculator available at:

www.gov.uklbenefit-cap

http://www.gov.uklbenefit-cap/http://www.gov.uklbenefit-cap/