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This briefing covers the introduction of the two-child limit, focussing on the debate from the announcement of the policy to its introduction in April 2017. The Commons Library briefing The impact of the two-child limit in Universal Credit looks at evidence that has emerged since.

Alongside universal Child Benefit, Child Tax Credit (CTC) provides means-tested support for low income families with children. Tax credits are being replaced by Universal Credit.

Announcement in Summer Budget 2015

Summer Budget 2015 announced important changes to tax credits and to Universal Credit, as part of a wider package of welfare measures to yield additional savings of £13 billion a year by 2020-21. From April 2017, the family element in Child Tax Credit and the equivalent in Universal Credit – worth £545 a year to most families – will be abolished for new claims.  The per child element in CTC and the equivalent element in UC – worth £2,780 a year – will also be limited to two children for new claims and births from 6 April 2017.  The Government justifies this on the grounds that families in receipt of means-tested benefits “should face the same financial choices about having children as those supporting themselves solely through work.”  The two measures will eventually yield savings of £5 billion a year, with the two child limit accounting for around £3 billion.  Around 900,000 families with three or more children currently receive tax credits.  Child Benefit will continue to be paid for all children.

Protections for existing claimants and in “exceptional circumstances”

There will be protection for families already getting support for third and subsequent children born before April 2017. The disabled child premia in tax credits and UC will also continue to be paid to all children with a disability.  Full support for third and subsequent children born after April 2017 will also be available in certain “exceptional circumstances.”  This will include children cared for by family or close friends under “kinship care” arrangements, children adopted from local authority care, and multiple births.  There will also be an exception for “non-consensual conceptions.”

Consultation on exceptions to the two child rule

In October 2016 the Government launched a consultation “to inform the detailed design” of the exceptions, and their implementation. The Government’s response in the light of the consultation was published on 20 January 2017, and regulations to provide for the exceptions were laid before Parliament on 15 March.  Both sets of regulations are subject to the negative resolution procedure.

Non-consensual conception

The two child limit – and the non-consensual conception exception category in particular – is highly controversial. The Government intends to use evidence from third party professionals – such as doctors and social workers – to determine eligibility for the exception on grounds of non-consensual conception.  The Social Security Advisory Committee has commented that DWP faces “complex challenges in ensuring that the proposals are delivered in an effective, fair and safe way”, flagging up concerns about privacy, the requirement that the woman is not living with the alleged perpetrator, and how the third party decision model will work in practice.

Secondary Legislation Scrutiny Committee reports

The House of Lords Secondary Legislation Scrutiny Committee questioned whether the Government had made adequate arrangements for assessing entitlement to the exception for non-consensual conception, noted financial and ethical concerns voiced by the local authorities and charities which DWP expects will be involved in third party assessments, and drew attention to particular issues relating to Northern Ireland. The Committee added that DWP’s responses to a number of its questions cast doubt on whether the system would be fully set up by 6 April, and on whether the exception for non-consensual conception can ever be made to work.

The Secondary Legislation Scrutiny Committee published a second report on 6 April, relating to further correspondence with the Minister for Employment about the Committee’s concerns.  While the Committee had received a clear answer about the numbers likely to be affected and where the burden of proof would lie, it said that the Minister’s responses to its other questions were “simply stock phrases.”  The Committee was not reassured about the availability and training of third party assessors.  In addition, it was “disappointed by the Government’s insistence that their “high-level messaging” following the Budget in 2015 was sufficient to alert claimants to the change in the law when the submissions we received indicated that this was clearly not the case.”  The Committee also observed: “As a general rule we find that publishing claimant guidance only on the day that the policy comes into effect unhelpful: in this case, we think it particularly inappropriate.”

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