WHAT DOES THE BENEFIT CAP MEAN TO ME?

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1 WHAT DOES THE BENEFIT CAP MEAN TO ME? DEVELOPING HOMES AND CREATING OPPORTUNITIES FOR PEOPLE WITHIN WEST NORFOLK

2 Disclaimer : The information provided in this booklet is sourced from DWP regulations and maybe subject to change. Freebridge Community Housing accepts no responsibility for any loss incurred whilst using this material or information, or from any action or decision taken as a result of using any such information. The information in this booklet is for general guidance only and is correct at the time of production. YOUR QUESTIONS

3 This is a booklet about The Benefit Cap. Over the next few pages we ll raise the questions that we get asked most about The Benefit Cap. Your questions are in white our answers are in blue. What is the benefit cap? Page 04 What is a household? Page 05 At what level is the benefit cap going to be set? Page 05 How will DWP calculate the benefit cap? Page 07 Why is benefit being capped? Page 07 What benefits does it affect? Page 09 What benefits are not included in the cap? Page 11 Which benefits will exempt me from the benefit cap? Page 13 What if I find work but don t qualify for Working Tax Credit? Page 14 How will DWP reduce my benefit? Page 15 3

4 What is the benefit cap? From April 2013 there will be a maximum amount of benefit that a household of working-age can be entitled to. 4

5 What is a household? A household is defined as an individual, their partner and any children that they are responsible for and who lives with them. At what level is the benefit cap going to be set? The level of the cap will be: 500 per week for couples (with or without children) and lone parents 350 per week for single adults. 5

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7 How will DWP calculate the benefit cap? By adding together all of the included benefits that you, your partner and any children you are responsible for and who live with you are entitled to (see list on page 9) It does not include non-dependents ( a non-dependent is someone who normally lives with the housing benefit claimant such as a son, daughter, relative or friend. Boarders and joint tenants are not non-dependents). Why is benefit being capped? As part of the Welfare Reform Act, this will help to ensure that individuals are no longer given more money when they are out of work than what they could reasonably expect to earn from working. 7

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9 What benefits does it affect? The benefits included in the cap are as follows: Housing Benefit Child Benefit Child Tax Credit Jobseekers Allowance Employment & Support Allowance (except where the Support component has been awarded) Income Support Incapacity Benefit Carers Allowance Maternity Allowance Severe Disablement Allowance Bereavement Allowance Widowed Parents Allowance Guardians Allowance Universal Credit (child care costs excluded). 9

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11 What benefits are not included in the cap? The benefits not included in the cap are as follows: Pension Credit Retirement Pension Statutory Sick Pay, Statutory Maternity Pay, Statutory Adoption Pay and Statutory Paternity Pay One-off payments such as discretionary housing payments Free school meals Winter Fuel Payment Council Tax Benefit (and its local replacement when introduced). 11

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13 Which benefits will exempt me from the benefit cap? If you, your partner or any children you are responsible for and who live with you in a household are entitled to any of the following benefits you will be exempt from the benefit cap and the amount of benefits you are entitled to will be unlimited (subject to you qualifying for each benefit): Single claimants of Pension Credit age Joint claimants if both are of Pension Credit age (if one party of a couple is of Pension Credit age and one is of working age then you will not be exempt from the cap) Households where someone is entitled to Working Tax Credit (NB. they do not actually have to be in receipt of WTC see below) Households with people receiving Disability Living Allowance (DLA), Personal Independence Payment (PIP), Attendance Allowance or Industrial Injuries Benefit The support component of Employment & Support Allowance War Widows or Widowers Pension People who lose their jobs through no fault of their own, after being employed for 50 out of the last 52 weeks and were working 16 hours or more in the last week of work, will be given 39 weeks grace to find new employment before the cap is applied. 13

14 What if I find work but don t qualify for Working Tax Credit? If you work sufficient hours to qualify for WTC, but your earnings are such that you will have nil entitlement, you will still be exempt from the benefit cap But if you don t work sufficient hours to qualify for WTC, the benefit cap will apply. 14

15 How will DWP reduce my benefit? At first only your Housing Benefit will go down to make sure that the total amount of your benefits is not more than the benefit cap level You may have to use your other benefits to pay Freebridge Community Housing to cover the shortfall in your rent In the longer term the cap will be applied as part of the new Universal Credit monthly payment. EXAMPLE Mr & Mrs Brown receive 490 in Income Support, Child Benefit and Child Tax Credit. Their Housing Benefit, which covers their full weekly rent, is 110. They receive a total of 600 per week. All of these benefits are included in the cap so they exceed the cap by 100 per week. The cap will be applied to the amount of Housing Benefit paid so they will lose 100 per week and only be paid 10 Housing Benefit. They will have to pay the shortfall of 100 per week to Freebridge Community Housing out of their income benefits. 15

16 FCH 0050 If you still have questions about The Benefit Cap, please call your Income Adviser on IF YOU NEED ANY HELP TO UNDERSTAND THIS LEAFLET PLEASE GET IN TOUCH Freebridge Community Housing Juniper House Austin Street King s Lynn Norfolk PE30 1DZ enquiries@freebridge.org.uk Main Switchboard Telephone: Office Opening Hours: 8:45am pm (Mon-Thurs) 8:45am pm (Fri) Bank Holidays, Saturday and Sunday Closed Out of Office Hours: The main telephone number ( ) will divert to our 24 hour emergency service.