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Welfare reform NI: the benefit cap

The benefit cap: what is it? 

Regulations have now been passed which means that the benefit cap will apply in Northern Ireland from 31 May 2016.

The benefit cap limits the amount, in total, that claimants can receive from a list of specified benefits.

The cap is currently:

  • £350 a week for single claimants
  • £500 for couples, with or without dependent children
  • £500 for lone parent families

How will it be applied?

Where a person’s benefit entitlement exceeds the cap, the reduction will be from the person’s Housing Benefit award.

What benefits are taken into account?

Most benefit income is taken into account:

  • Bereavement Allowance
  • Child Benefit
  • Child Tax Credit
  • Employment and Support Allowance (ESA)
  • Guardian’s Allowance
  • Housing Benefit
  • Incapacity Benefit
  • Income Support
  • Jobseeker's Allowance (JSA)
  • Maternity Allowance
  • Severe Disablement Allowance
  • Widowed Parent's Allowance
  • Widowed Mothers Allowance
  • Widows Pension

Are there any exemptions?

The cap will not apply where the person claiming or her/his partner is receiving one of the following benefits:

  • Disability Living Allowance (including if received for a dependent child)
  • Working Tax Credit
  • Attendance Allowance
  • Industrial Injuries Disablement Benefits
  • Employment and Support Allowance, if paid with the support component
  • War Widow's or War Widower's Pension.
  • Carer’s Allowance

The cap will also not apply where the person claiming or her/his partner had, in at least 50 out of the last 52 weeks, been in employment and not entitled to Income Support, JSA or ESA. In these circumstances, the cap will not apply for 39 weeks from the day after the last day of employment.

Additional exemptions as part of NI welfare reform mitigations

Two additional exemptions apply specifically to Northern Ireland as part of the welfare reform mitigations.

The first mitigation ensured that those in receipt of Carer’s Allowance were exempt from the cap: this has now been inserted into the legislation.

The second mitigation ensures that any families with children not exempt under the above provisions will receive a supplementary payment to compensate for any deduction made as a result of the cap being applied. This applies for up to four years.

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