Two Child Limit to benefit payments: new data sheds light on which families are hardest hit
Seven years ago this April the two-child limit was introduced to reduce the amount of money families with three or more children received when claiming benefit payments. Today, if a family has a child born after April 2017, and two or more other children they will not receive the child element of Universal Credit, or Child Tax Credits, for this third child. This means that families are missing out on just over £3000 per child per year.
The two-child limit policy, introduced seven years ago, restricts benefits for larger families, leading to 1 in 10 (1.5 million) children living in poverty. End Child Poverty Coalition calls, to scrap it, could lift 300,000 children out of poverty.
Rachel Walters
The justification given for this policy is that it is supposedly a way to ensure that families who receive benefit payments are making ‘the same financial decisions as families supporting themselves solely through work’[1] . Yet the actual outcome is that 1 in 10 children now live in a home where the family income is capped by this limit to benefit payments - that equals 1.5 million children. And the vast majority of these children are living in poverty.
Many families could have planned to support more than two children without needing help from the benefits system. But for many reasons - including a family break up, death of a partner, losing a job and the cost-of-living crisis – are no longer able to meet the financial requirements of raising their children, and have turned to payments such as Universal Credit to help.
We hear from families across the UK of the huge impact that limiting the amount of money coming into a family has. For example Rosie, a mum to three children in the North East, says:
“I had to put my 3-month-old son into childcare so that I could go and wash pots in order to pay for essentials. I often had to choose between paying for new clothes for my children or paying the gas and electricity bill. I had to take out loans to be able to afford food.
Today, I am still impacted by this policy psychologically. My children have even said that they don’t want kids of their own because they have seen me struggle.”
Families with children outside DWP (Caxton House)
Photo: Jonathan Hyams/ Save the Children
The End Child Poverty Coalition is made up of over 100 organisations including child welfare groups, social justice groups, faith groups, trade unions and others. Together with a group of Youth Ambassadors we all believe that no child growing up in the UK should live in poverty. We ask that this and future governments commit to end child poverty.
As a Coalition we have been calling for the two-child limit to be scrapped for many years. As this is a clear example of a policy which directly pushes families into poverty. Scrapping it now would immediately lift 300,000 children out of poverty, and a further 800,000 children would be living in less deep poverty.[2] However, our calls have intensified in this election year as we want all political parties to commit, in their manifestos, to scrap this cruel policy.
To further make the case for doing away with this policy we have looked closely at the data highlighting which families are being impacted the most, and whereabouts in the country these families live. We now have figures for the number of children impacted by this policy in each parliamentary constituency, and shockingly we now know that that every UK constituency is home to families whose income is being limited by this. But there is widespread variation across the country – in some constituencies the rate is as high as 3 in 10 children living in households affected by this policy. The worst hit area is Blackley and Broughton in the North West where 32% of all children live in a household impacted by this policy. This area also has a child poverty rate of 49%. In general, the constituencies most affected by the two-child limit are those with the highest child poverty rates.
Mother with children outside DWP (Caxton House)
Photo: Jonathan Hyams/ Save the Children
We are also trying to understand which families are most impacted by this policy. And again, it is shocking to uncover that the most vulnerable families seem to be hit by this. Data obtained under the Freedom of Information act shows that:
• 50% of families impacted by the policy are single parent families
• 20% of all households impacted have at least one disabled child
• 25% of all households impacted are single parents with a child under 3 years old [3]
Single parents with children under 3 wouldn’t be expected to work under Universal Credit requirements yet are having payments limited by the two-child limit. And families with disabled children may well find it hard to obtain work which fits around care needs. Plus they have the added costs of caring for someone with a disability (such as increased gas and electricity costs) – and are also having their payments capped.
Via a series of questions put forward by Mary Kelly Foy MP we also know that the government has made no assessment of whether the two-child limit is meeting its policy objectives.[4] There have been no assessments of the barriers to work for those impacted by the policy.[5] And no assessment has been made of the potential correlation between the two-child limit and levels of child poverty.[6]
However, it is predicted that if it remains in place this limit to benefit payments will push 51% of children in larger families into poverty by 2028-29.[7] The cost of scrapping this policy stands at just £1.8 billion, making it the most cost-effective way to reduce child poverty.[8] All the evidence clearly shows that scrapping this policy should be at the top of the agenda for all political parties who are looking to reduce child poverty levels across the UK.
[1] The Guardian, 2022, Sunak urged to drop ‘unspeakably cruel’ two-child limit and benefit cap, https://www.theguardian.com/society/2022/dec/25/sunak-urged-to-drop-unspeakably-cruel-two-child-limit-and-benefit-cap
[2] Child Poverty Action Group; Budget Submission 2024, 2024
[3] https://endchildpoverty.org.uk/2childlimit/
[4] https://questions-statements.parliament.uk/written-questions/detail/2023-12-07/5913
[5] https://questions-statements.parliament.uk/written-questions/detail/2023-12-07/5912
[6] https://questions-statements.parliament.uk/written-questions/detail/2023-12-06/5588
[7] Resolution Foundation, Catastrophic Caps, 2024, https://www.resolutionfoundation.org/publications/catastophic-caps/#:~:text=The%20two%2Dchild%20limit%20results,a%20year%2C%20poverty%20rates%20soar.
[8] Child Poverty Action Group; Budget Submission 2024, 2024
