Four month warning as DWP benefits recipients face payments cut – everything you need to know

Child Poverty Action Group cautions that failure to raise cap will push more people beyond its threshold

Thousands of British people in receipt of regular benefits payments from the Department for Work and Pensions (DWP) face seeing their entitlement cut from April 2024 despite the 6.7 per cent raise announced in the chancellor’s recent Autumn Statement, a charity has warned.

The Child Poverty Action Group (CPAG) has cautioned that Jeremy Hunt’s decision not to raise the benefit cap – the total amount people of working age in need can claim – in tandem with payments, as he did in his 2022 statement, will mean that the increase he did announce will actually serve to push more people beyond the cap’s threshold.

“Increasing benefit rates and support with rent costs will make a difference to many families continuing to struggle with rising prices, who approach this winter terrified about how they will get by. But, sadly, these changes will provide absolutely no help to the over 85,000 households affected by the benefit cap, who will receive not one penny more,” CPAG said in a statement.

“The benefit cap severs the link between need and entitlement in our social security system: a household will have their total need for support assessed, and if this comes out above the level of the cap (currently £22,020 per year for families with children, or £25,323 for families in London) they will simply receive less than they need.

“There are wide variations in the amounts that households are capped, but the average is £53 a week, a loss keenly felt by those already struggling to survive below the poverty line.”

A spokesperson for the DWP told The Independent: “We are supporting the most vulnerable with a record £94bn cost of living support package – worth around £3,700 per household – and have halved inflation to make everyone’s money go further.

“On top of this we’ve raised benefits by 10.1 per cent and are investing £3.5bn to help thousands into jobs – the best way to help people secure long term financial security.”

Here’s everything you need to know about the cap.

What is the benefit cap and how much is it?

The cap is determined according to an applicant’s circumstances, taking into account their location, whether or not they have children and whether they are applying as a single person or as part of a couple.

The cap is set at the following rates if you live outside of London:

• £423.46 per week or £1,835 per month if you’re a couple
• £423.46 per week or £1,835 per month if you’re a single parent and your children live with you
• £283.71 per week or £1,229.42 per month if you’re a single adult

If you live within greater London, the cap is set at the following rates:

• £486.98 per week or £2,110.25 per month if you’re a couple
• £486.98 per week or £2,110.25 per month if you’re a single parent and your children live with you
• £326.26 per week or £1,413.92 per month if you’re a single adult

Who does it apply to?

The cap typically applies to people aged between 16 and state pension age and in receipt of any of the following payments:

• Universal Credit
• Bereavement Allowance
• Child Benefit
• Child Tax Credit
• Employment and Support Allowance
• Housing Benefit
• Incapacity Benefit
• Income Support
• Jobseeker’s Allowance
• Maternity Allowance
• Severe Disablement Allowance
• Widowed Parent’s Allowance (or Widowed Mother’s Allowance or Widow’s Pension if you started getting it before 9 April 2001)

Who is exempt?

Anyone above state pension age is not affected by the cap and it will not affect anyone below that marker if they or their partner:

• Receive Working Tax Credit
• Receive Universal Credit because of a disability or health condition that stops you from working
• Receive Universal Credit because they care for someone with a disability
• Receive Universal Credit and they and their partner earn £722 or more a month combined, after tax and National Insurance contributions

People are also exempted from the cap if they, their partner or any children under 18 living with them receives:

• Adult Disability Payment
• Armed Forces Compensation Scheme
• Armed Forces Independence Payment
• Attendance Allowance
• Carer’s Allowance
• Child Disability Payment
• Disability Living Allowance
• Employment and Support Allowance (if they receive the support component)
• Guardian’s Allowance
• Industrial Injuries Benefits (and equivalent payments as part of a War Disablement Pension or the Armed Forces Compensation Scheme)
• Personal Independence Payment
• War pensions
• War Widow’s or War Widower’s Pension

If you are affected by the cap, it is worth bearing in mind that it might not start to apply for nine months, depending on your earnings, thanks to a “grace period” allowed for.

If the cap does place you in difficulties, the government advises you to contact the DWP or your local council as soon as possible.

For more information on the benefit cap, visit the UK government’s website or Citizens Advice and, to determine whether or not it will affect you, visit the charity Turn2Us’s benefits calculator.