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Single parents bear brunt of benefit cap – who’s affected

The benefit cap limits the amount of support you can get – and the Government’s planning to shrink it even more. This is who could be affected.

Large, single parent families living in London are most likely to be affected by the benefit cap, according to the latest Government figures.

In the two years to May 2015, nearly two in three families affected by the cap were headed by single parents. One in three of these families had five children or more.

And 18 out of the 20 most affected areas were in London.

Single parents charity Gingerbread believes roughly seven in ten single parents will be caring for a child under the age of five.

Gingerbread’s chief executive Fiona Weir said: “The cap is billed as a policy that ‘incentivises’ parents to find work.

“But we know that single parents are already highly motivated to work and that for those with very young children, it is low pay, the high cost of childcare and lack of the right part-time jobs that make it particularly difficult for them to work.”

The benefits cap was originally set at £26,000, but the Government now plans to slash it to £20,000 outside of London. This means more families are likely to be affected.

The first thing to know is if you’re working and receiving Working Tax Credits, you won’t be affected.

Anyone claiming a Personal Independence Payment or the Employment and Support Allowance for support reasons will also be unaffected.

But if you’re claiming another common benefit – like Housing Benefit, Carer’s Allowance or Child Benefit – you could be affected. You can check your own situation using this benefits calculator from benefits charity Turn2us.

Linda Gyamfi, a welfare benefits specialist from the charity, explains in more detail:

What is the benefit cap?

In 2013, a cap was introduced to limit the total amount in some benefits that working-age people can receive, even if their full entitlement to benefits would otherwise be higher.

This ‘benefit cap’ affects people in England, Scotland and Wales. It is not yet law in Northern Ireland but may be introduced at a later date.

The cap is currently set at £26,000 a year for families – £500 a week for a couple or lone parent, regardless of the number of children they have.

The maximum for single adults is £350 a week. However, the Government has announced proposals to lower the cap further to £20,000 a year.

The cap applies to the total amount that households get from the following benefits:

  • Bereavement Allowance
  • Carer’s Allowance
  • Child Benefit
  • Child Tax Credit
  • Employment and Support Allowance (except for the support group)
  • Guardian’s Allowance
  • Housing Benefit (except for certain vulnerable groups)
  • Incapacity Benefit
  • Income Support
  • Jobseeker’s Allowance
  • Maternity Allowance
  • Severe Disablement Allowance
  • Universal Credit
  • Widowed Parent’s Allowance
  • Widowed Mother’s Allowance
  • Widow’s Pension

All other benefits are not included in the cap.

ou will be exempt, regardless of the amount you receive in benefits, if you, your partner or a dependent child is receiving one of the following benefits:

  • Armed Forces Compensation Scheme Payments
  • Armed Forces Independence Payment
  • Attendance Allowance
  • Disability Living Allowance
  • Employment and Support Allowance (support group)
  • Industrial Injuries Disablement Benefit
  • Limited Capacity for Work Related Activity element of Universal Credit
  • Personal Independence Payment
  • War Disablement Pension
  • War Widow’s or Widower’s Pension
  • Working Tax Credit

If you are not entitled to Housing Benefit or Universal Credit the cap is not applied.

You are also exempt from the benefit cap if you’re over the qualifying age for Pension Credit. If you’re in a couple where one of you is over the qualifying age for Pension Credit and the other is not, you will usually be exempt but there are some exceptions to this and you should seek advice if you’re in this position.

Carers are not automatically exempt from the cap, but they may be exempt if the person they care for is their partner or a dependent child that they live with.

This is because that person’s disability benefit will exempt the household. If you are a carer affected by the cap you should seek further advice on your situation.

How is the cap applied?

Under the current benefits system, if your total weekly income from the benefits included in the cap is more than the cap limit, your Housing Benefit payment will be reduced by your local authority to bring you down to the cap level.

You must be left with at least 50p a week Housing Benefit, so that you can still access discretionary housing payments and other ‘passported’ payments.

If you are receiving Universal Credit, and your total monthly income from benefits included in the cap exceeds the cap limit, it is your Universal Credit that will be reduced to bring you down to the cap amount.

It is also important to seek advice from a benefits adviser if you are concerned about how the cap might affect you. You can use the free Turn2us Find an Adviser tool to find one in your local area.

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