The Household Benefit Cap - Commons Library Standard Note

Published 27 March 2014 | Standard notes SN06294

Authors: Wendy Wilson

Topic: Housing, Housing benefits, Private rented housing, Social rented housing

As part of the October 2010 Spending Review the Government announced an intention to cap total household benefits at £500 per week for a family and £350 per week for a single person with no children from April 2013 (implementation was subsequently delayed). The benefit cap is one of the welfare reform measures announced as part of the Government’s deficit reduction plans. It is expected to deliver savings of £110m in 2013/14 and £185m in each of the following four years. The expected savings were revised downwards in Budget 2013 after estimates of the numbers of households affected were revised downwards in April 2013.

The Benefit Cap (Housing Benefit) Regulations 2012 introduced the cap on household benefits from 15 April 2013 in the London boroughs of Croydon, Enfield, Haringey and Bromley. National roll-out was managed over a 10 week period split into two tranches:

• Tranche 1 included all local authorities with 275 affected households or fewer - capping commenced in these areas on 15 July 2013;

• Tranche 2 included all local authorities with 276 or more households to be capped and commenced from the week of 12 August 2013.

The Universal Credit Regulations 2013 provide for an overall benefit cap within Universal Credit (UC). UC is being phased in up to 2017.

This note explains how the cap operates and summarises reactions to it, including attempts to amend the cap as the Welfare Reform Act progressed through the House of Lords.

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