Benefit Cap to be rolled out in Northern Ireland

The benefits cap is to be introduced to Northern Ireland from 31^st May, 2016.

What is the benefits cap?

The cap is contained in the Welfare Reform (Northern Ireland) Order 2015, and places a limit on the total amount of benefits working-age households can receive. Benefits which count towards the calculation of the cap are:

• Bereavement Allowance
• Child Benefit
• Child Tax Credit
• Employment and Support Allowance (except where the Support Component has been awarded)
• Guardian’s Allowance
• Housing Benefit
• Incapacity Benefit
• Income Support
• Jobseeker’s Allowance
• Maternity Allowance
• Severe Disablement Allowance
• Widowed Parent’s Allowance
• Widowed Mother’s Allowance
• Widow’s Pension
• Widow’s Pension (age-related)

The cap is initially set at:

• £26,000 per year, or £500 per week, for couples (with or without children) and lone parents who are responsible for their children;
• £18,200 per year, or £350 per week, for single people.

How will the cap be applied?

If a household exceeds the cap, their Housing Benefit will be reduced by the relevant amount. However, no household’s Housing Benefit can be reduced below a nominal amount of £0.50 per week – this will allow the household to apply for Discretionary Housing Payments, or other funds which rely on eligibility to Housing Benefit. The Benefit Cap cannot be enforced by reducing any other benefit.

For example, if a couple with 2 children currently receive £530 per week in the benefits named above, the benefit cap will mean that their Housing Benefit will be reduced by £29.50 per week.

The Department for Social Development estimate that 400 households in Northern Ireland will be affected by this cap.

Are there any exemptions to the cap?

Yes. If any member of a household qualifies for Working Tax Credit (even if they receive a “nil amount”), the household will be exempt from the cap.

A household will also be exempt if any member of it, including children, receive any of the following disability benefits:

• Attendance Allowance
• Carer’s Allowance
• Disability Living Allowance (and its replacement, Personal Independence Payment)
• Employment and Support Allowance (where the Support Component has been awarded)
• Industrial Injuries Benefit
• Armed Forces Compensation Scheme (Guaranteed Income Payments)
• Armed Forces Independence Payment
• the War Pension Scheme (this includes the War Widow’s/Widower’s pension and war disablement pension)

Finally, if any member of the household has been in work for 50 of the previous 52 weeks, there will be a “grace period” of 39 weeks before the cap is applied to the household.

Isn’t the benefits cap mitigated anyway?

Yes, initially. The Mitigations Working Group report recommended that any households losing out due to the cap should have their losses mitigated fully, until 31^st March 2020. The Assembly has recently passed Regulations which enact this recommendation.

Advice & information

Call 028 9024 5640, or visit housingadviceni.org, for free, independent and expert advice on housing issues.