← Overview Database of Innovative Social Policies in Europe
Country of implementation
General short description of the innovation
In April 2013, the Coalition Government introduced a cap on the total amount of benefits that working age people can receive. Households on working age benefits can no longer receive more in benefits than the average wage for working families (œ500 per week). The cap can be applied through Housing Benefit payments or the new Universal Credit. These arrangements will continue until Universal Credit is fully in place and the cap from Housing Benefit is no longer required. / / The cap applies to the total amount that the people in a household get from benefits including: Carer?s Allowance, Child Benefit, Child Tax Credit, Employment and Support Allowance except for certain cases), Housing Benefit, Incapacity Benefit, Income Support, Jobseeker?s Allowance, Maternity Allowance, Severe Disablement Allowance, Universal Credit, Widow?s Pension.
Type of Policy
Duration of the policy
Since April 2013
Scope of innovation
- Scope: structural
- Spatial coverage: national
General description of (intended) objectives and strategies
The benefit cap is one of the welfare reform measures announced as part of the Government?s deficit reduction plans. It seeks to save taxpayers? money and aims to encourage people into work, and deliver fairness to the taxpayer in work.
Type of innovation
- new policy, practice or measure
- benefit eligibility
- benefit level
Clarification of intended mechanisms, outputs and outcomes (optional)
Applied through Housing Benefit the cap is œ500 a week for couples and single parent households and œ350 a week for single adult households without children. Applied through Universal Credit the cap is œ2,167 a month for joint claimants and single claimants with children, and œ1,517 a month for a single claimant with no dependent children.
Intended target group
Various groups of several welfare benefit recipients
Working age population
- employment situation (employed as well as unemployed in receipt of various benefits)
- main source of income: paid work
- main source of income: social protection (various benefits including social assistance and disability benefits)
Actors involved in policy-making/implementation and/or evaluation
- central state
- benefit eligibility
- benefit level
Clarification of outcomes in terms of impacting resilience and labour market inclusion
The cap was expected to deliver savings of œ110m in 2013/14 and œ185m 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. / / In January 2014 the DWP reported that of the households capped 60% had between 1 and 4 children and 36% had 5 or more children; 59% of households constituted a single parent with child dependants. 78% of households were capped by œ100 or less. / / Research led by the Chartered Institute of Housing (CIH) (Davies et al. 2013) into the initial impact of the cap in Haringey ? one of four London boroughs chosen by the government to implement the cap early ? found that just 10% of households affected in Haringey were able to find work to avoid seeing their benefits cut. / / Sources: / Davies, A. et al. (2013). Experiences and effects of the benefit cap in Haringey, Chartered Institute of Housing. / DWP (2014). Benefit cap. Number of households capped., https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/286767/benefit-cap-jan-2014.xls [accessed: 14 April 2014] / Mori, I. (2013). The Benefit Cap: Public perceptions and pre-implementation effects, DWP Research Report No. 850, London. / Wilson, W. (2014). The Household Benefit Cap, House of Commons Library briefings, 27 March 2014.