Benefit Cap and the Benefit Freeze

The benefit cap limits the total amount people can be paid if they claim certain benefits. It applies to people of working age; people of pension age are exempt. When all a person's benefits are added up, their housing benefit or universal credit is reduced so that total benefits don't go above the cap limit.

The benefit cap calculation includes these benefits:

  • Housing Benefit (unless living in supported housing)
  • Income Support
  • Jobseeker's Allowance
  • Employment and Support Allowance (unless in the support group)
  • Incapacity Benefit
  • Child Benefit and Child Tax Credits
  • maternity benefits and widows benefits paid by the Department for Work and Pensions
  • Severe Disablement Allowance
  • Universal Credit

In October 2016 there were 59 households in Wakefield District affected by the overall Benefit Cap of £500 per week for couples and lone parents and £350 per week for single people without children. From 7th November 2016 the cap has been lowered to £384.62 per week for couples and lone parents, and £257.69 per week for single people without children. An impact assessment by the Department for Work and Pensions prior to the change estimated 400 households would be affected by the new Cap level.

The numbers of households affected has been falling gradually (see chart below). Some months appear to record much lower numbers, but this is a consequence of when and how the data are being collected. Around two-thirds of capped households are renting from social landlords, and one-third are renting privately.

Source: DWP Stat-Xplore API.

Around three-quarters of all households affected by the cap are single parent households (see table below). The cap tends to affect families with higher numbers of dependent children. Half of the families affected have four or more dependent children.

Number of capped households by family type and number of dependent children in households
Source: DWP (Stat-Xplore API) Period: ?

The amount a household is capped varies (see table below). For some families this represents a significant loss of income compared to what they were receiving before the cap.

Number of capped households by weekly cap amount (£)
Source: DWP (Stat-Xplore API) Period: ?

The Benefit Freeze

A freeze on working-age benefit levels was introduced in 2016. The benefits affected are listed below. The House of Commons holds an annual debate on social security uprating, but the benefits freeze in the Welfare Reform and Work Act 2016 means that the frozen benefits are excluded from this process.

  • Jobseekers’ Allowance
  • Employment and Support Allowance (but not the support group component)
  • Income Support
  • Child Benefit
  • applicable amounts for Housing Benefit
  • Local Housing Allowance rates, with provision for high rent areas.
  • Child tax credit and working tax credit (excluding disability elements)

Separate from the benefit freeze, a number of other benefit policies are starting affect households in the District, and particularly households with children.

  • The ‘two-child limit’ came into force in 2017–18, which means that families no longer receive child elements in Child Tax Credit and Universal Credit for third or subsequent children born on or after 6 April 2017.
  • The family element in Child Tax Credit of £545 a year was also abolished in 2017–18 for families with an eldest child born on or after 6 April 2017.
  • Families with children have been affected by the removal of the family premium in Housing Benefit, which has applied to new claimants and new births since 1 May 2016.