The benefit cap and housing costs: what tenants need to know

The benefit cap limits the total amount of benefits a household can receive. For many tenants, the cap affects how much of their housing costs are covered by benefits, and can leave a significant gap between their benefits income and their rent. We cover how the cap works, who it applies to, and what options exist when the cap affects your housing.

What is the benefit cap?

The benefit cap is a limit on the total amount of specified benefits that a working-age household can receive each week or month. It applies to a range of benefits taken together, including Universal Credit, Housing Benefit, Child Benefit, and certain other payments, not to each benefit individually.

The cap levels (as of 2025) are:

• Families with children and lone parents outside Greater London: £423.46 per week (£22,020 per year)
• Families with children and lone parents in Greater London: £486.98 per week (£25,323 per year)
• Single adults without children outside London: £283.71 per week
• Single adults without children in London: £326.29 per week

These figures may have been uprated. Check the current amounts on the government's website or through Citizens Advice.

How the cap affects housing costs

When the cap applies, Universal Credit or Housing Benefit is reduced so that your total benefits income does not exceed the cap. Because housing costs are a large part of many households' benefit income, it is often the housing element of Universal Credit (or Housing Benefit for legacy claimants) that takes the biggest reduction.

This means the cap can leave you with a shortfall between what benefits pay toward your rent and what your rent actually costs.

Who is exempt from the benefit cap?

The cap does not apply to all households. Exemptions include:

Households where someone is in work: if you or your partner earns at least £722 per month from employment (the equivalent of 16 hours per week at the national living wage), the cap does not apply. This is a significant exemption and is one reason why the government sees the cap as an incentive to work.

Households receiving certain disability benefits: if you, your partner, or a child in your household receives:

• Personal Independence Payment (PIP)
• Disability Living Allowance (DLA)
• Attendance Allowance
• Carer's Allowance
• Employment and Support Allowance (in the support group)
• Armed Forces Independence Payment

...the household is exempt from the cap.

Households in supported exempt accommodation: accommodation that provides care, support, or supervision is often exempt.

Households who have recently left work: there is a 9-month grace period from the cap if you or your partner have been continuously employed for at least 50 weeks in the previous year and have earnings of at least £604 per month in each of those weeks.

What can I do if the cap affects my housing?

Discretionary Housing Payment (DHP): if the benefit cap leaves you with a shortfall between your housing element and your rent, you can apply for a DHP from your local council. DHPs are not guaranteed, but are available to help people who cannot cover housing costs because of the benefit cap. They are typically short-term and are intended as a bridge while you take steps to manage the situation.

Check your exemptions: make sure you are not being capped when you should be exempt. If you receive PIP or DLA and are still being capped, report this to the DWP immediately.

Challenge an incorrect decision: if you believe the cap has been applied incorrectly, you can ask for a mandatory reconsideration and then appeal to a tribunal.

Negotiate with your landlord: if your rent exceeds the local housing allowance and the cap is creating a shortfall, talking to your landlord about a rent reduction may be worth attempting. Landlords who are aware of your circumstances and value a reliable tenancy may be willing to discuss this.

Seek advice: Citizens Advice and local welfare rights organisations can provide detailed advice on your specific situation, check whether you qualify for any exemptions, and help you challenge incorrect decisions.

Benefit cap and homelessness risk

If the benefit cap makes housing unaffordable and you are at risk of eviction due to arrears, you may be approaching the point of homelessness. If so:

• Contact your local council's housing department immediately
• Do not wait until you receive a court possession order, act as early as possible
• Ask for a homelessness application and keep all written correspondence

When should I contact Support for Tenants?

If you are managing a benefit cap shortfall and your home also has disrepair, heating failures, damp, structural problems, a compensation award from a successful disrepair claim does not affect your benefits entitlement in the same way as earned income or savings. We can advise whether you have a claim.

Call us on 0800 030 4669. No upfront cost. You only pay if you win, and the fee comes out of the compensation, not your pocket. If you don't win, you pay nothing.

Sources

• Welfare Reform Act 2012 (the benefit cap) (legislation.gov.uk)
• Benefit cap (GOV.UK)

Related articles

• Universal Credit and housing costs explained