The cap sets a limit on the welfare payments that an individual can receive. 

It applies to people receiving jobseeker’s allowance, child benefit, child tax credits and housing benefit and will see couples and single parents receive a maximum of £500 while single people will only receive £350.

Housing benefit will be reduced to prevent the total benefits received going above these limits.

The cap applies if you are out of work and claiming benefits such as income support, employment and support allowance and jobseeker’s allowance.

The cap will not apply to you if you work enough hours to be eligible for working tax credit, if you receive certain disability benefits and a few other exemptions.

Child maintenance payments will not be included in the cap.

The Department of Work and Pensions estimates that around 40,000 households will be affected by the cap.