Glossary · UK
What is Benefit Cap?
A limit on the total weekly benefits a household can receive, set at GBP 442.31/week for couples and lone parents outside London in 2026/27, ensuring work always pays more than welfare.
Full Definition
The Benefit Cap limits the total amount of welfare benefits a household can receive each week. For 2026/27 the cap is GBP 442.31 per week (GBP 23,000 per year) for couples and lone parents outside London, and GBP 296.35 per week for single adults without children outside London. London rates are higher: GBP 486.98 per week for couples and lone parents, GBP 326.29 for single adults. Benefits counted toward the cap include Universal Credit (excluding the work allowance element), Housing Benefit, Child Benefit, Child Tax Credit, Income Support, Jobseekers Allowance, Employment and Support Allowance (in the assessment phase), and several others. The cap is enforced by reducing the Universal Credit award or, for those still on Housing Benefit, by reducing that payment. Certain claimants are exempt from the cap entirely: households where any member receives Disability Living Allowance, Personal Independence Payment, Attendance Allowance, Armed Forces Independence Payment, Carer's Allowance, or Support for Mortgage Interest. Working households earning enough to receive the UC work allowance are also exempt, which is the primary financial incentive to enter employment. A 9-month grace period applies for claimants who were employed (earning above a minimum threshold) for 12 continuous months immediately before becoming unemployed -- during this window the cap does not apply, easing the transition. The cap was introduced in April 2013 under the Welfare Reform Act 2012 and was significantly reduced in 2016. It has been uprated periodically since. Claimants affected by the cap can ask their local authority for Discretionary Housing Payments to cover any Housing Benefit shortfall while they seek work or find alternative accommodation.