Benefit cap rates to remain unchanged as state support rises – payments to be affected | Personal Finance | Finance


Benefit cap rules limit the total amount of support a person can get from state benefits. The limits affect most people who are aged between 16 and state pension age.

Generally, those who are over state pension age will not be affected by the cap.

Additionally, the cap will not affect people if they, their partner or children under 18 get certain benefits such as the armed forces compensation scheme, attendance allowance or carer’s allowance.

Where a person is impacted, the benefit cap may not start for nine months, depending on the claimant’s earning levels.

This “grace period” will mainly impact Universal Credit claimants who have stopped working and are earning less than £604 a month.

Universal Credit itself saw a separate uplift in 2020 as the government increased what was paid out by around £20 a week.

This was in direct response to coronavirus as the lockdown drastically altered income and employment levels.

Since the uplift was introduced in early 2020, many have called for the increase to be made permanent or at least extended into late 2021.

In addressing this, Will Quince, a DWP minister, recently confirmed that Rishi Sunak will review the plans in the spring: “All those on Universal Credit will have that increase to the standard allowance and the security of that through til the spring next year, so the end of March, early April.

“But what I would say – because I know there’s lots of people, charities and others that are rightly raising questions about this with me about what’s going to happen post then – throughout this crisis, the Chancellor has always made sure that he has looked after the most vulnerable in our society.

“But I think what he has rightly said, is, ‘Look, let’s get to that point.’

“See where we are in the spring of next year, the early part of next year.

“Where we are with the economy, where we are with health restrictions, where we are with the vaccine and then let him have the time to make the decision about how best to support people who need help, so he’s able to make a clear decision next year.”

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