What is the two-child benefit cap and when will it be lifted?
Getty ImagesThe two-child benefit cap will be lifted from April 2026, Chancellor Rachel Reeves announced in the Budget.
The limit means that many low-income families do not currently receive further benefits after having a third or subsequent child.
What is the two-child cap and how many people does it affect?
The policy, introduced by former Conservative chancellor George Osborne, means parents can only claim universal credit or tax credits for their first two children.
It appliesto third or subsequent children born after 6 April 2017.
A total of 1.6 million children are in larger families which cannot claim these means-tested benefits as a result.
If the cap had not been introduced, affected families could have received an average of £4,400 in benefit entitlements a year, according to the Institute for Fiscal Studies (IFS) think tank. It estimates that the policy has saved the Treasury about £3.6bn a year.
What changed in the Budget?
Reeves said the two-child cap had pushed "hundreds of thousands of children into poverty since it was introduced".
She announced that the cap will be scrapped from April 2026.
In 2029-30 an estimated 560,000 families will see an increase in universal credit averaging £5,310 per year.
The government says this measure will lift 450,000 children out of poverty.
Removing the cap will cost £2.3bn in 2026-27 and £3bn in 2029-30, according to the Office for Budget Responsibility.
Are there exceptions to the cap?
Currently, if you have, for example, four children born before 6 April 2017, then you will still receive additional payments. That relates to children aged under 16, or young people aged under 20 who are in full-time education or training.
If a parent, or parents, have one child, and the next are twins or triplets, then a claim can be made for all these children.
Claims can also be made if children are born after rape, or from a coercive relationship. Reeves said she would end this "rape clause" calling it "dehumanising and cruel" to women.
Payments can also go to children who are adopted, in your care rather than local authority care, or are a child of your child.
Why was the cap criticised?
More than 100 charities had written to the chancellor to call for the two-child limit to be scrapped.
A host of backbench Labour MPs also wantedthe chancellor to scrap it, arguing that it would bring hundreds of thousands of children out of poverty.
The Conservatives supported the cap, saying it made the system fairer, and meant parents on benefits face the same financial choices as parents who fund themselves solely through work.
So the cap has nothing to do with child benefit?
Correct. There is often a misconception that the two-child limit affects the payment of child benefit, because it is called the two-child benefit cap.
So, take a breath between "two-child" and "benefit".
This policy isspecifically directed at universal credit and tax credits, not child benefit.
