Q&A: The benefits cap and you
The government says that households claiming benefits should be no better off than the average family in work.
The result is the benefits cap, which is being rolled out across England, Scotland and Wales from 15 July.
It will limit how much any one household can receive in state benefits.
All households will be capped by the end of September 2013.
But who will be affected, and how?
What is the cap?
The cap is set at £500 a week for couples or single parents and £350 a week for single adults. This equates roughly to the average take-home pay of £26,000 a year.
Which benefits count towards the cap?
Bereavement Allowance, Carer's Allowance, Child Benefit, Child Tax Credit, Employment and Support Allowance (except where paid with the support component), 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 and Widow's Pension (including the age-related component).
Which benefits do not count towards the cap?
Bereavement Payment, Council Tax Benefit (or its replacement), Discretionary Housing payments, Social Fund payments (including cold weather payments), Pension Credit, Residency Order payments, Adoption Pay, Maternity and Paternity Pay, Statutory Sick Pay and Winter Fuel Payment.
Who will be exempt from the cap?
Those entitled to Working Tax Credit are exempt. Also, no pensioners will be subject to the cap, as it only affects people of working age.
The cap will also not apply in any household where the claimant, the partner, or a child receives any of the following benefits: Disability Living Allowance or Personal Independence Payments, Attendance Allowance, the support component of Employment and Support Allowance, Industrial Injuries Benefits (including war disablement pensions), War Widows and War Widowers pensions.
When will the cap actually start?
Anyone who has been in work continuously for the last 12 months will be given a 39 week "grace" period, in which the cap will not apply.
Those living in the four London boroughs of Haringey, Croydon, Enfield and Bromley had the cap applied from 1 April 2013.
All local authorities with less than 276 households affected will begin capping on 15 July. Most of these are rural, or areas where rents are relatively low. All others, including most of the UK's big urban areas, will commence on 12 August. Everyone will be subject to the cap by the end of September 2013.
How will the money be taken back?
Those subject to the cap will lose some of their Housing Benefit, which is paid to help people with their rent.
Is there any relief available?
The government is making an extra £65m of help available in 2013 through local authorities.
This is designed to help individuals with extra costs, like moving home. In 2014-15 it will provide £35m of help.