This dashboard has statistics on Universal Credit by constituency in Great Britain, including the Library's estimate of how far caseload rollout has progressed.
The two-child limit
As a result of measures first announced in the Conservative Government’s Summer Budget in 2015, the per child element in Child Tax Credit and in Universal Credit was limited to two children for new claims and births from 6 April 2017. The Government justified 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.” Around 900,000 families with three or more children currently receive tax credits. The two child limit is expected to eventually yield savings of around £3 billion a year. There are limited exceptions to the rule, including where children are born as a result of “non-consensual conception.”
Further background to the policy can be found in Commons Library briefing CBP-7935, The two child limit in tax credits and Universal Credit (10 April 2017).
Detailed information on how the two-child limit applies can be found at the Child Poverty Action Group website – see Ask CPAG Online – the two-child limit.
For further comment/analysis see:
- Jonathan Bradshaw, Why the two-child policy is the worst social security policy ever, Social Policy Association 50th Anniversary Blog Series No 3, 1 November 2017.
- Kirsty McKechnie, Two-child limit: one year on, CPAG Welfare Rights Bulletin, Issue 263, April 2018.
- CPAG and the Church of England, Unhappy Birthday! The Two-Child Limit at One Year Old, April 2018.
- Letter to The Times from faith leaders expressing concern about the consequences of the two-child limit policy for children and families, 6 April 2018
The first statistics on the impact of the policy were published in June – see DWP and HMRC, Child Tax Credit and Universal Credit claimants: statistics related to the policy to provide support for a maximum of 2 children, April 2018. 73,530 households were affected by the two-child limit policy at 2 April 2018, of whom:
- 70,620 households were not receiving a child element or amount for at least one child; and
- 2,900 households were covered by an exception to the policy
Of the affected households:
- 9% were classified as in-work; and
- 62% contained two adults
And of the households covered by an exception:
- 2,440 (84%) were covered by a multiple birth exception;
- 270 (9%) received an exception for non-parental care; and
- 190 households (7%) had an exception for “non-consensual conception”.
Cases with an exception for adoption was below the threshold for publication (4 households or fewer).
The number of families affected by the two-child limit will however increase sharply over the next few years. The CPAG and Church of England report (see above) estimated that by 2020-21 the two-child limit will affect around 640,000 families including around 2 million children.
Policy changes since the two-child limit was introduced
The only substantive changes to the policy since its introduction have been to the exceptions for families looking after children under kinship care arrangements, or who have adopted a child. This was in response to the High Court’s judgment on 20 April in the case of SC & Ors v Secretary of State for Work And Pensions & Ors  EWHC 864 (Admin).
The original rules applied as follows. Whereas a child element would be payable for a third child joining a family under a kinship care arrangement, if a family already had two children and one or both were being looked after under kinship care, if they had another child of their own the child element would not be payable for that child. So in other words, a child element was available to three children if the family had two biological children and then took on a child in kinship care, but not if the child in kinship care arrived first. Hence the order in which the child became a member of the household mattered.
The case was brought by the Child Poverty Action Group. The High Court accepted CPAG’s arguments that the ordering restriction on the kinship care exception was perverse and therefore unlawful. A wider challenge to the policy as a whole was however dismissed. There’s further information at the CPAG website – see High court finds two-child rule exception perverse, 20 April 2018.
The Government accepted the High Court’s decision in relation to children joining a family under kinship care arrangements, and said that it also intended to make corresponding changes to the two child limit rules in relation to adopted children, for whom the ordering or sequencing issue also applies – see Extending support in Universal Credit and Child Tax Credit: Written statement – HCWS653, 27 April 2018; and More support for non-parental carers, DWP press release, 27 April 2018). The changes are made by the Universal Credit and Jobseeker’s Allowance (Miscellaneous Amendments) Regulations 2018 (SI 2018/1129), and the Child Tax Credit (Amendment) Regulations 2018 (SI 2018/1130), and come into force in 28 November 2018.
Further legal challenge
In its judgment on 20 April, the High Court did not accept the Child Poverty Action Group’s wider challenge to the lawfulness of the two-child rule as breaching fundamental human rights to private and family life and to non-discrimination. Commenting on the ruling, CPAG’s solicitor Carla Clarke, said:
“This is a policy which is not simply about what level of benefits predominantly working families are entitled to. Rather, it is a policy which necessarily encroaches upon very personal and intimate decisions about family size and planning and treats some children as less deserving of a benefit intended to meet their basic needs purely because of their birth order. We do not agree with the judge’s findings on the various human rights arguments and will look to appeal this case further.”
The substantive challenge to the two-child policy is now being appealed to the Court of Appeal. The hearing is expected take place on 19 and 20 December 2018.
The two-child limit and Universal Credit
Until 31 January 2019, families with three or more children are prevented from making a new claim for Universal Credit but can instead claim tax credits and Housing Benefit. From 1 February 2019, Universal Credit claims will be accepted from families with three or more children, and the two-child limit will apply regardless of when the children were born. The child element will not be paid for third and subsequent children, unless an exception applies.
However, if a child element for a third or subsequent child born before 6 April 2017 was already included in a UC or tax credits award before 1 February 2019, that will continue provided:
- the claimant or their partner was getting Universal Credit on 31 January 2019 and were responsible for the child on that day; or
- they started getting UC on or after 1 February 2019 and the claimant or their partner were getting the Child Tax Credit child element for the child (or the equivalent in Income Support or income-based JSA) in an award that ended within the last six months; and
– there are at least two other children born before 6 April 2017 for whom the claimant or their partner is already responsible.
For further information see Ask CPAG Online – how does the two-child limit apply to universal credit?
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