The Benefit cap is a government measure which restricts the total amount of welfare benefits you can receive in a year. This is currently set at £26,000 but from this autumn it will be reduced to £23,000 for people in London and £20,000 for people outside London. The cap is applied by making a deduction (either part or full) from your Housing Benefit. Anyone affected way is then responsible to pay any shortfall that arises in their rent from their other benefit income. We now have the long awaited figures from the Department of Work and Pensions (DWP) showing the number of Sandwell households who will be affected by the reduction.
It’s important to stress that these numbers only show the number of households who would be affected if the new cap was to be applied immediately. However, it won’t actually be implemented until the autumn of this year, (we don’t yet have a firm date) and the DWP will be working hard with those affected to encourage them back into employment so that they are no longer affected.
The numbers are actually lower than many people expected. In total, there will be 941 households. This breaks down by tenancy type as follows:
• Council tenants – 402
• Housing Association tenants – 159
• non-standard tenancies for homelessness etc – 15
• Private tenants – 365
A number of these cases (126) are households who have already been affected by the existing benefit cap, so that their benefits have been reduced to the £26,000 limit already in place, but will now face a further reduction to bring them down to £20,000.
When set against our current total caseload – the figures show that relatively, only a small number of people in Sandwell will be affected. In simple terms, it will mainly be larger families in larger accommodation and there will be no impact on most of our benefit claimants. The DWP have produced a benefit cap calculator which lets you work out whether the cap applies to you, but unfortunately, this is still set on the old £26,000 so wont help you work out if you will be affected by the new figure. As soon as we know that the calculator has been updated, we will do another blog post to let you know. In the meantime – you can find more information about the cap, such as what benefits are included in calculating your income and who might qualify for an exemption on gov.uk