DWP claimants face payment cuts next year

Thousands of Britons receiving regular benefit payments from the Department for Work and Pensions (DWP) face cuts to their benefits from April 2024 despite a 6.7 per cent rise announced in the chancellor's recent autumn statement, a charity has warned.

The Child Poverty Action Group (CPAG) warned that Jeremy Hunt's decision not to increase the benefit cap – the total amount that people of working age in need can claim – alongside payments, as it did in his statement in 2022, will mean that The increase he announced will actually serve to push more people over the limit of the cap.

“Increasing benefit rates and support with rent costs will make a difference to many families who continue to struggle with rising prices, who are approaching this winter terrified of how they will cope. But unfortunately these changes will offer absolutely no help to the over 85,000 households affected by the benefit cap, who will not receive a penny more,” CPAG said in a statement.

“The benefit cap separates the relationship between need and entitlement in our social security system: a household will be assessed its total need for support and if this exceeds the level of the cap (currently £22,020 a year for families with children, or £25,323 for families in London) will simply get less than they need.

“There is wide variation in the amounts on which households are cut, but the average is £53 a week, a loss keenly felt by those already struggling to survive below the poverty line.”

Here's everything you need to know about the cap.

What is the benefit cap and how much is it?

The upper limit is determined according to the circumstances of the applicant, taking into account their location, whether they have children or not and whether they are applying as a single person or as part of a couple.

The cap is set at the following rates if you live outside London:

  • £423.46 per week or £1,835 per month if you are a couple
  • £423.46 a week or £1,835 a month if you're a lone parent and your children live with you
  • £283.71 per week or £1,229.42 per month if you are a single adult

If you live in Greater London, the cap is set at the following values:

  • £486.98 per week or £2,110.25 per month if you are a couple
  • £486.98 per week or £2,110.25 per month if you are a lone parent and your children live with you
  • £326.26 per week or £1,413.92 per month if you are a single adult

Who does it apply to?

The cap usually applies to people aged between 16 and State Pension age who receive any of the following payments:

  • Universal Credit
  • Bereavement allowance
  • Child Benefit
  • Child tax credit
  • Employment and Support Allowance
  • Housing Benefit
  • Incapacity benefit
  • Income support
  • Work Request Allowance
  • Maternity allowance
  • Severe disability allowance
  • Parent's widow's allowance (or widow's mother's allowance or widow's pension if you started getting it before 9 April 2001)

Who is excluded?

Anyone over the state pension age is not affected by the cap and it will not affect anyone below that if they or their partner:

  • Get working tax credit
  • Get Universal Credit because of a disability or health condition that prevents you from working
  • Get Universal Credit because they care for someone with a disability
  • They get universal credit and they and their partner earn £722 or more a month together, after tax and National Insurance contributions

People are also exempt from the cap if they, their partner or any children under 18 living with them receive:

  • Adult disability allowance
  • Armed Forces Compensation Scheme
  • Armed Forces Independence Pay
  • Attendance Allowance
  • Carer's Allowance
  • Child Disability Payment
  • Disability Living Allowance
  • Employment and Support Allowance (if receiving the support element)
  • Guardian allowance
  • Work injury benefits (and equivalent payments as part of a war disability pension or armed forces compensation scheme)
  • Personal Independence Payment
  • War pensions
  • War Widow's or War Widower's Pension

If you are affected by the cap, it's worth bearing in mind that it may not kick in for nine months, depending on your earnings, thanks to the ‘grace period' allowed.

If your cap is causing you difficulties, the government advises you to contact the DWP or your local council as soon as possible.

For more information about the benefit cap, visit the UK Government website or Citizens Advice and, to work out whether or not it will affect you, visit the Turn2Us charity's benefits calculator.