Labour is reportedly contemplating removing the two-child benefit limit, which was put in place by the Conservatives in April 2017. This cap restricts Universal Credit and Child Tax Credit to the first two children in most households, meaning that benefits cannot be claimed for any third or subsequent children born after April 2017. Advocates argue that this limitation exacerbates poverty by withholding assistance from families in need.
Data from the Department for Work and Pensions reveals that nearly 1.7 million children across 469,780 households are affected by the two-child cap. While no official decision has been announced by Labour, any potential alterations to the benefit system could be disclosed during the Autumn Budget on November 26.
Government sources have emphasized that no determinations have been finalized yet. Speculations suggest that the two-child benefit limit might be substituted with a new tapered system where parents receive reduced financial support for each additional child. Additionally, the Treasury is exploring options such as limiting extra benefits to three or four children or lifting the cap solely for working parents on Universal Credit.
Chancellor Rachel Reeves has been cautioned by Treasury officials that abolishing the two-child benefit cap entirely could incur a cost of around £3.5 billion. When asked if she intends to lift the cap at the Budget, she indicated that policies to reduce child poverty would be outlined in due course, emphasizing the importance of financial transparency.
Prime Minister, speaking to The Mirror politics team, expressed personal commitment to combating child poverty, highlighting the government’s policy focus on this issue. He underlined the significance of reducing child poverty and emphasized the government’s determination to achieve this objective.