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Will the benefits cap affect you if you're a pensioner?
Published 3 January 2017 by Emily Bancroft
Find out if your benefits have changed.
If you claim benefits, you might find you don’t get as much as you did a few months ago. That’s because in November 2016, the benefits cap limit dropped to £20,000 a year per household, or £23,000 if you live in London.
The lower benefits cap means that some of the poorest families on benefits in the UK could now be struggling to make ends meet. But if you’re a pensioner, will the benefits cap affect what you can claim? Pension Credit doesn’t come under the benefits cap – but could it affect you in other ways?
Which benefits are affected?
The benefits cap is the maximum amount you can claim in a year. It means that even if you claim several different benefits, your household can never get more than £20,000 in a year. Or, if you live in London, you can claim up to £23,000 a year per household.
Only certain benefits come under the benefits cap. These are:
• Bereavement Allowance,
• Child Benefit,
• Child Tax Credit,
• Employment and Support Allowance,
• Housing Benefit,
• Incapacity Benefit,
• Income support,
• Jobseeker's Allowance,
• Maternity Allowance,
• Severe Disablement Allowance,
• Widowed Parent's Allowance,
• Widowed Mother's Allowance, and
• Widow's Pension.
So it’s only these benefits that are included when you’re working out whether the benefits cap will affect how much you can claim. Any other benefits don’t come under it.
Will it affect you?
The benefits cap doesn’t affect everyone on benefits – certain groups of people are exempt from it. This includes if you or your partner qualify for Working Tax Credit or if you’re over the qualifying age for Pension Credit. This means that if you’re a pensioner, the benefits cap won’t affect how much you can claim.
You also won’t have to worry about the benefits cap if you claim certain benefits, including Personal Independence Payment, Universal Credit for 'limited capability for work and work-related activity' or Working Tax Credit.
Is anything else changing?
Over the next year, new claimants will no longer get Pension Credit. Instead, they’ll just get Universal Credit. The change will come after the rollout of Universal Credit for the rest of the country – it’s likely to be late 2017.
This will only affect you if you start claiming Pension Credit after the benefit has moved under Universal Credit. If you’re already over Pension Age and you claim Pension Credit, you don’t need to worry about the change.
But if you’re due to reach pension age at some point after the change to Pension Credit or if there’s a break in your Pension Credit for some reason, it will affect you. And if this is the case, you might want to think about managing Universal Credit with a budgeting account.