The Conservative Party has announced plans to reform the household benefit cap, aiming to prevent some households from receiving unlimited benefit payments. The cap, which limits the total amount of benefits most working-age people can claim, currently has exemptions for certain groups, including recipients of Personal Independence Payment (Pip) and households on Universal Credit that earn £881 or more per month.
Under the proposed changes, households would only be exempt if all adults who can work are employed. Receiving benefits like Pip would no longer automatically exempt a household from the cap. The party claims these measures would save at least £1 billion annually.
Conservative leader Kemi Badenoch stated that the plans would "stop those who abuse the system getting almost unlimited welfare payments." According to latest government figures, 111,000 households in Great Britain are currently affected by the cap, but the Tories note that over 2.3 million households claim benefits above the cap due to exemptions, including work.
Currently, the cap level varies based on location, household composition, and whether claimants have children. For a couple outside Greater London, the limit is £1,835 per month. The cap was introduced in 2013 under the coalition government to encourage employment and reduce long-term benefit dependency. Critics argue that it traps families in poverty by limiting support for part-time, low-income, or out-of-work households.
In Northern Ireland, the cap applies, but supplementary payments mitigate its impact on families with children.
The proposed changes specify that where a couple can both work, each must work at least 16 hours a week to qualify for exemption. Where only one person can work, that individual must work 16 hours a week, matching the current requirement. Under the current system, if one household member receives an exempting benefit like Pip or Employment and Support Allowance (ESA), the entire household's benefits become uncapped. The Tories would alter this: the exempting benefit would remain as a specific top-up, but the overall cap would still apply.
The party also pledges to continue reviewing how the cap is implemented.
Badenoch said, "Welfare must always be there for those who need it most, but it should never discourage work or reward dependency. The Conservatives believe in fairness, and that means those on welfare should have to make the same choices about their family as those who are not."
These proposals are part of a broader £23 billion welfare savings package, which includes restricting benefits to UK citizens and ending sickness benefits for less serious mental health conditions. The Tories also vow to reinstate the two-child benefit cap, which the current government scrapped in April. That separate cap limited Universal Credit or tax credits to the first two children.
The government had proposed restricting disability benefit eligibility last year but largely dropped those plans after a Labour MP revolt. However, it claims to be saving £1 billion by reducing the health-related element of Universal Credit for new claimants by up to 50%.
Meanwhile, the government says scrapping the two-child cap will lift 450,000 children out of poverty.
The Liberal Democrats, Green Party, Scottish National Party, and Plaid Cymru have all called for the household benefit cap to be abolished. Reform UK has also pledged significant welfare cuts, including stopping disability benefits for less serious mental health conditions and reinstating the two-child cap.