The two-child benefit cap came into force in April 2017 and it restricts Universal Credit and Child Tax Credit to the first two children in most households
Labour is said to be considering axing the two-child benefit limit – but what exactly is the controversial cap, and how does it work?
The two-child benefit cap came into force in April 2017, having been introduced by the Conservatives. It restricts Universal Credit and Child Tax Credit to the first two children in most households.
This means you normally cannot claim these benefits for any third or additional children born after April 2017. Campaigners have argued that restricting benefits creates poverty by denying help to families who may be struggling.
Almost 1.7 million children (1,665,540) are impacted by the two-child limit, in 469,780 households, according to data from the Department for Work and Pensions (DWP).
Is the two-child benefit cap being replaced?
At the moment, no official decision has been announced by Labour. If any changes to the benefit system were to be introduced, it would likely be announced in the Autumn Budget on November 26.
Government officials stressed that no decision has been made yet. One government source told The Mirror politics team: “No decisions have been made. Work on the child poverty strategy is ongoing.”
What could it be replaced with?
Reports suggested the two-child benefit limit could be replaced with a new tapered system that sees parents receive less cash for each kid they have.
Another option the Treasury is said to be considering is whether additional benefits could be limited to three or four children, or lifting the cap for working parents on Universal Credit only.
What has Rachel Reeves said?
Chancellor Rachel Reeves is reported to have been warned by Treasury officials that scraping the two-child benefit cap entirely would cost in the region of £3.5billion.
Asked whether she would will lift the cap at the Budget, she told the Labour conference: “Keir said in his speech today that we will reduce child poverty in this Parliament, but we will set out the policies in the Budget.
“I think we’ve been pretty clear this week that we can’t commit to policies without us explaining where the money is coming from.”
What has Keir Starmer said?
Speaking to The Mirror politics team on Tuesday, the Prime Minister said: “I am personally determined to see child poverty come now.
“I was very proud that that’s what happened under last Labour government, and I’m absolutely determined it’s going to happen under my leadership under this Labour government.
“So yes, this is government policy, but it’s also personal to me to bring child poverty down.”