The benefit cap is not the same as the changes to Local Housing Allowance (LHA) which have been taking place since April last year.
The current assumption is that the cap will be set at £350 a week for single adults with no children and at £500 a week for couples (with or without children) and lone parents with dependant children.
In the first instance the cap will be administered jointly by Department for Work and Pensions and local authorities and be deducted from Housing Benefit payments.
In the long term it will form part of the new Universal Credit system. The DWP will be sending a letter to all claimants potentially affected by the cap during 2012.
Households (the benefit recipient, partner and children who they are responsible for and who live with them) will be exempt from the cap where someone is:
- entitled to Working Tax Credit
- in receipt of War Widows and Widowers Pension, or
- in receipt of Disability Living Allowance (Personal Independence Payment from April 2013), Attendance Allowance or Constant Attendance Allowance.
Finding work and qualifying for Working Tax Credit is the best way to ensure the cap doesn't apply
People will need to be aware of which benefits they receive and how much their award is for, in order to understand how the cap might affect them. This information is available from award letters or by contacting the departments that pay the benefits. Further information about benefits is available on the DirectGov website (external link).