Labour is reportedly contemplating removing the two-child benefit limit. This controversial cap, implemented by the Conservatives in April 2017, restricts Universal Credit and Child Tax Credit to the first two children in most households.
The two-child benefit cap affects approximately 1.7 million children in 469,780 households, according to data from the Department for Work and Pensions (DWP). Critics argue that this restriction exacerbates poverty by withholding support from families in need.
While no official decision has been made by Labour yet, speculations suggest potential changes to the benefit system could be announced in the Autumn Budget on November 26. Government officials emphasize that discussions on the child poverty strategy are ongoing.
Possible alternatives being considered include replacing the two-child benefit limit with a tapered system where parents receive reduced benefits per child. The Treasury is also exploring options like limiting additional benefits to three or four children or lifting the cap for working parents on Universal Credit.
Chancellor Rachel Reeves has been cautioned by Treasury officials that eliminating the two-child benefit cap entirely could incur a cost of around £3.5 billion. When asked about potentially lifting the cap at the Budget, Reeves stated that policies to reduce child poverty would be outlined in due course, emphasizing the need for clarity on funding sources.
Prime Minister expressed a personal commitment to reducing child poverty, highlighting the importance of this goal under the current Labour government. There is a strong focus on addressing child poverty as both a government policy and a personal mission.
Overall, discussions surrounding potential changes to the two-child benefit limit are ongoing, with various options under consideration to address concerns about poverty and support for families in need.