How the Government's Welfare Cap will work

The Government is capping the amount it spends on social security. Credit: Anna Gowthorpe/PA Wire/Press Association Images

MPs have voted overwhelmingly in favour of the government's Welfare Cap, bringing a ceiling to the amount the Treasury can spend on social security.

There was cross party support for the plans, with 520 MPs voting in favour of the cap.

Read: 520 MPs vote for welfare spending cap

Here is how it will work:

  • The cap limits overall spending on benefits to £119.5bn in 2014/15.

  • It does not include the state pension or Jobseeker's Allowance.

  • It is different to the Benefits Cap, which limits the amount a household can receive from social security to £26,000 a year.

  • The Chancellor will have to set total welfare spending at the beginning of each Parliament - MPs will have to approve any extra spending on top of this.

  • The total annual welfare spend will go up year-on-year in line with forecast inflation. The Treasury projects it will hit £126.7bn by 2018/19.

Here is a full run-down of all the benefits covered under the new cap:

  • Housing Benefit (except HB passported from JSA)

  • Winter Fuel Payments

  • Personal Tax Credits

  • Child Benefit

  • Tax-Free Childcare

  • Disability Living Allowance

  • Employment and Support Allowance

  • Incapacity Benefit

  • Income Support

  • Attendance Allowance

  • Statutory Adoption Pay

  • Statutory Maternity Pay

  • Statutory Paternity Pay

  • Universal Credit (except payments to jobseekers)

  • Bereavement benefits

  • Carer’s Allowance

  • Financial Assistance Scheme

  • Industrial injuries benefit

  • In work credit

  • Maternity Allowance

  • Pension Credit

  • Personal Independence Payment

  • Return to Work Credit

  • Severe Disablement Allowance

  • Social Fund - Cold Weather Payments

  • Christmas Bonus

And these are the benefits which will not be limited:

  • State Pension (basic and additional)

  • Jobseeker's Allowance and its passported Housing Benefit

  • Universal Credit payments subject to full conditionality and with zero income

  • Transfers within government (e.g. Over-75s TV licences)

  • Benefits paid by individual government departments