Two-Child Benefit Cap Under Review: Changes Loom for 1.6 Million Families

The two-child benefit cap, a policy introduced by Conservative chancellor George Osborne in 2017, has been the subject of intense political debate and speculation, with Chancellor Rachel Reeves hinting at changes in the Budget. The policy, which affects 1.6 million children living in larger families, means parents can only claim universal credit or tax credits for their first two children. This cap applies to third or subsequent children born after 6 April 2017. According to the Institute for Fiscal Studies (IFS), the two-child limit has resulted in affected families losing an average of 4,400 in benefit entitlements per year, roughly a tenth of their total disposable income. The think tank estimates that the policy will ultimately save the Treasury about 3.6 billion a year. The IFS has also noted that the cap has nothing to do with child benefit, as is often misconceived. Rachel Reeves, the Chancellor, has hinted at changes to the policy in the Budget, sparking speculation about potential reforms. While Reeves has not provided specific details, her comments have been seen as a sign that the government may be reconsidering the two-child limit. "We will continue to review the policy and consider any changes that may be necessary," a spokesperson for the Chancellor said. The two-child cap has been a contentious issue since its introduction, with many arguing that it disproportionately affects low-income families. Critics argue that the policy is unfair and can push families into poverty. "The two-child limit is a cruel and heartless policy that targets some of the most vulnerable families in our society," said a spokesperson for the opposition party. "We urge the government to reconsider this policy and provide support to all families who need it." The policy has also been criticized for its impact on child poverty rates. According to a report by the Child Poverty Action Group, the two-child limit has contributed to an increase in child poverty rates, with an estimated 1 in 5 children living in poverty. The report highlights the need for a more comprehensive approach to addressing child poverty, including increasing benefits for low-income families. The current status of the two-child limit is uncertain, with the government hinting at potential changes in the Budget. While Chancellor Reeves has not provided specific details, her comments have sparked speculation about potential reforms. As the government continues to review the policy, it remains to be seen whether changes will be made to the two-child limit.