End to two-child benefit cap offers £300-a-month lifeline to cash-strapped families | Family finances
The two-child benefit policy has been described as the “limit of childhood” and as it comes to an end, Claire* hopes to throw a birthday party for her son.
It’s a celebration that most kids take for granted, but Claire and her husband run out of money at the end of each month and skip meals so their three children can eat. Her son, now in his last year of primary school, had never partied.
The cap, introduced under the Conservatives in 2017 that allowed parents to claim universal credit (UC) or tax credits for only their first two children, was removed by the Labor government in the last budget.
The decision means that from April 6, low-income families will be eligible for a payment of around £300 a month for each additional child in the household. Families already in UC should automatically receive the extra money.
Claire’s story is one of many collected by the Child Poverty Action Group (CPAG); this group estimates that 109 children are pushed into poverty every day because of the two-child policy, as families cannot meet their basic needs.
This cap is blamed for record levels of child poverty in the UK, which has risen by 900,000 since 2010 to 4.5 million. An estimated 483,000 families are affected by the claim limit in 2025.
CPAG chief executive Alison Garnham said children growing up in poverty had “poorer health and education outcomes, lower life expectancy and lower earnings as adults”. Lifting the cap was “a critical first step in turning around opportunities for children.”
One of the three children told the charity that she worked part-time and her husband worked full-time, but they were still in debt due to the pandemic. “The kids have only been back to school for two weeks and I’m already in debt for school meals and upcoming school trips,” she said. “If my child is the only child who does not go, this will affect him too. I budget every month to the last penny.”
At a cost of £2.3bn next year, the government said scrapping the policy was “the single most cost-effective measure available” to reduce poverty rates. The change will mainly help working families; Nearly 60% of border-affected households have a working parent, and almost half were not in UC when their child was born, it was also noted.
Claire’s oldest child has special needs and has stopped working because of the support he needs. He said extra payments of £3,650 a year for their third child would help pay food bills. Her son has outgrown his bed and his two children need new beds, but such things are “unaffordable”.
Citizens Advice says it has seen the “devastating impact this policy has on families every day”. David Mendes da Costa, the company’s head of policy, said lifting the cap “will mean the difference between going into debt and being able to afford basic needs like food and school uniforms.”
The charity said people eligible for more support could expect higher payments in May or June, depending on the date of their UC assessment period.
However, household aid limitIt puts a cap on the total amount of benefit working-age households can receive at a maximum of £2,110.25 per month, or £1,835 outside London, meaning not everyone will see an increase.
Dan Paskins, chief executive of UK impact at Save the Children UK, said: “Over the past nine years, there has been a de facto cap on childhood as the two-child limit on benefits leaves families poor and deprives children in larger families of the same opportunities as their peers. Residual incomes have a better chance of matching the real cost of raising a family, as well as better health outcomes, educational attainment and long-term job prospects for children.”
*Names have been changed
