As far as I am aware, the email template should have been sent to advise the DWP that the claimant was no longer in receipt of HB and a "remove cap" notification would have been received by the LA. In this instance I would process the claim as normal and wait for the "apply cap" notification.
Per circular A10/2016 – the regs allow you to administer a cap before the DWP send the LA the notification to apply the cap, but the DWP do not expect you to.
