Two-child benefit cap hits more than 70,000 families in first 12 months

By Andrew Woodcock28th June 2018News EnglandAusterity, Benefits, Government / Politics, News England, Poverty / Austerity, Welfare / Benefits, Welfare Reform

More than 70,000 families lost benefits worth up to £2,780 a year in the first 12 months of operation of the new two-child cap, according to official figures.

Campaigners called for a review of the policy, warning that it would pull 200,000 children into poverty, the majority of them in struggling families in low-income work.

But ministers insisted that the cap was being implemented in a “compassionate” way, with exemptions in cases of multiple births or children born as a result of rape.

Figures released by HM Revenue & Customs and the Department for Work and Pensions showed that by April this year, some 70,620 families with had been caught by the cap – about 9% of the total number of claimants.

The vast majority were receiving child tax credit, with just 3% on universal credit, but in both cases they lost the child element of their welfare for third and subsequent offspring born after April 2017 – worth £232 a month for each child.

Some 59% of those affected were in work and 62% were two-adult households. Around 63,000 of the families who lost money were in England, almost 4,000 in Scotland, 3,000 in Wales and 2,000 in Northern Ireland.

Introducing the two-child cap in 2015, then work and pensions secretary Iain Duncan Smith said that its purpose was to bring home to parents on benefits “the reality that children cost money and if you have more kids you have to make the choices others make and not assume taxpayers’ money lets you avoid the consequences of such choices”.

But Child Poverty Action Group chief executive Alison Garnham (pictured) said the new figures showed it was “already having a damaging impact – and at a fast pace”.

“These are struggling families, most of them in work, who will lose up to £2,780 a year – a huge amount if you’re a parent on low pay,” said Ms Garnham.

“An estimated one in six UK children will be living in a family affected by the two-child limit once the policy has had its full impact. It’s a pernicious, poverty-producing policy.

“Even when times are tough, parents share family resources equally among their children, but now the Government is treating some children as less deserving of support purely because of their order of birth. Having older siblings should not mean that a child misses out on support.”

Some 60 Church of England bishops and senior representatives of other denominations and faiths wrote an open letter in April urging ministers to rethink the policy.

And shadow work and pensions secretary Margaret Greenwood said the numbers affected were “truly shocking”.

“The two-child limit is an attack on low-income families, is morally wrong and risks pushing children into poverty,” said Ms Greenwood.

“It cannot be right that the Government is making children a target for austerity, treating one child as if they matter less than another.

“Labour will make tackling child poverty the priority it should be once again.”

A Government spokesman said: “The policy to provide support in Child Tax Credit and Universal Credit for a maximum of two children ensures people on benefits have to make the same financial choices as those supporting themselves solely through work.

“We are delivering this in the most effective, compassionate way, with the right exceptions and safeguards in place.”

Some 2,820 households were exempted from the cap, most of them (2,440) because of multiple births taking them over the two-child limit.

Some 190 were exempted because of non-consensual conception, with 270 exempted because they were friends or relatives taking in children who would otherwise go into care.