Benefit warning as cap could impact your Universal Credit – 180,000 families already hit

Martin Lewis: 500,000 more people now eligible for Universal Credit

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More than 20 million people are receiving benefits from the Department for Work and Pensions (DWP) to help top up their incomes. However, new figures just released show that 180,000 families have had their benefits capped – concerning news for anyone on Universal Credit or receiving Housing Benefit.

As millions more Britons are relying on benefits to top up their incomes than ever before, it’s emerged that hundreds of thousands of people are having their money capped.

The benefit cap is an upper limit on the amount of money working age claimants who are out of work can receive.

In 2015 it was changed so that a person can’t take home more than £20,000 a year or £13,400 for single adults without children.

Now campaigners are worried that this will leave thousands of people facing impossible decisions this Christmas.

The benefit cap can be applied through Universal Credit or Housing Benefit so anyone who is receiving either of these benefits should be aware.

Despite it affecting 180,000 families in the 12 months leading up to August 2021, the number of people capped has dropped 2percent on the previous quarter.

Jon Sparkes, chief executive at Crisis, told “These figures once again confirm the difficulties being faced by thousands up and down the country because of the economic pressures of the pandemic.

“Since the time of this data, we’ve seen the cost of living and renting rapidly rising, putting people under more financial strain, and edging them even closer to homelessness.”

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He continued: “We cannot leave thousands of people facing impossible decisions this Christmas – forced to pick between keeping a roof over their head, putting the heating on as temperatures plummet or keeping food on the table.

“To make sure even more people are not left stuck like this, the Government must not only invest in housing benefit to ensure that it keeps pace with the real cost of renting but introduce exemptions from the benefit cap for people who are forced to sleep rough, so they can afford to find somewhere safe and secure to live.”

The benefit cap is a limit on the total amount of money a claimant could receive from state benefits.

It applies to most people aged between 16 and state pension age.

However, there are some exceptions to the cap and generally a person will not be affected if they’re over the state pension age.

That’s currently 66 but it will be rising to 68 in the next few years.

Where a person lives in the UK also affects the cap, with London residents allowed to take home more money before being capped.

In the 2015 Budget, it was announced that a single person could earn £23,000 per year in Greater London or £15,410 for single adults with no children.

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Furthermore, a person will not be affected by the cap if they or their partner are entitled to:

  • Working Tax Credit
  • Universal Credit because of a disability or health condition that stops them from working
  • Universal Credit and they and their partner earn £617 or more a month combined, after tax and National Insurance contributions.

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