How the benefit cap works and who it affects

The benefit cap is a policy that limits the total amount of state benefits a working-age household can receive in a year. If the combined value of your benefits exceeds the cap, the amount paid is reduced to bring it in line with the limit. It does not mean benefits are stopped entirely. It means the total is capped at a set figure, with Universal Credit usually being the payment that is reduced to make up the difference.

What are the current cap levels?

Cap levels vary depending on where you live and your household circumstances. As of April 2025, the annual cap for couples and lone parents in Greater London is £26,948 (approximately £518 per week). Outside London, the cap is £23,548 per year (approximately £453 per week). For single adults without children, the cap is lower: £17,803 outside London and £23,548 in Greater London. These figures are reviewed periodically and may change.

Which benefits count toward the cap?

The cap applies to the combined total of most welfare benefits, including Universal Credit (the housing element, child element and standard allowance), Child Benefit, Housing Benefit, Child Tax Credit and several others. It does not apply to all benefits. Disability Living Allowance, Personal Independence Payment, Attendance Allowance and Carer's Allowance are not counted toward the cap total.

Who is exempt from the cap?

Several groups are exempt from the benefit cap entirely. You will not be capped if you or your partner receive certain disability benefits, including PIP, the support component of Employment and Support Allowance, or the limited capability for work-related activity element of Universal Credit. Working households earning above the equivalent of sixteen hours a week at National Living Wage are also exempt, which is one reason the cap creates an incentive to move into work even at a low number of hours.

Households receiving Working Tax Credit or the equivalent through Universal Credit are also exempt. If you are close to the threshold for exemption through work, it is worth checking carefully whether a small increase in hours could lift you out of the cap entirely.

What to do if you are affected

If your benefits are being reduced because of the cap, Citizens Advice or a local welfare rights service can help you check whether you qualify for an exemption that is not currently being applied. Errors do occur and exemptions are sometimes missed. It is also worth checking whether any changes to your circumstances, such as starting work, qualifying for a disability benefit, or becoming a carer, would lift the cap in your case.