Two-child benefit limit scrapped as government's child poverty plan takes effect

The government's flagship child poverty measures are now taking effect, with the removal of the two-child limit on benefit support billed by ministers as the centrepiece of a strategy intended to deliver the biggest fall in child poverty in a single parliament for decades.

The two-child limit, which had restricted means-tested support to a family's first two children, was scrapped under legislation that received Royal Assent earlier in the year, with the change taking effect from the start of the new tax year. The government estimates the move will lift around 450,000 children out of poverty by the end of the parliament.

What the strategy does

Removing the two-child limit is the most significant single element of the wider Child Poverty Strategy, but it is not the only one. The package also includes an expansion of free school meals to all children in households on Universal Credit, a measure due to come into force later in the year.

Taken together, ministers say, the strategy could lift around 550,000 children out of poverty, which they describe as the largest reduction in a single parliament since comparable records began in the 1990s. The combination of cash support through the benefits system and in-kind support through free school meals is designed to reach families in different circumstances, including those in work but on low incomes.

Officials have framed the package as a deliberate shift in approach after years in which child poverty figures had been rising. By targeting both the largest families, who were most affected by the two-child limit, and the broader population of low-income households, the government argues it is addressing the problem on more than one front.

• The two-child limit on Universal Credit and Child Tax Credit has been removed
• The change is estimated to lift around 450,000 children out of poverty
• Free school meals are being expanded to all children in households on Universal Credit
• The full package is projected to lift roughly 550,000 children out of poverty
• Ministers call it the largest single-parliament reduction in child poverty since the 1990s

“Tackling child poverty is a moral mission, and scrapping the two-child limit is the single biggest step we can take to deliver it.”

— A government spokesperson

The arguments on both sides

Charities and anti-poverty campaigners, many of whom had pressed hard for the cap to be removed, broadly welcomed the change, while cautioning that more would be needed to make a lasting difference. Before the policy was scrapped, campaigners estimated that well over a million children were affected by the limit.

Critics question the cost of abolishing the cap and warn about the pressure it places on the welfare budget at a time of tight public finances. Some argue that work, rather than benefit increases, is the more sustainable route out of poverty, while others counter that employment alone has not been enough to reverse rising child poverty in recent years.

Background

The two-child limit was introduced by a previous Conservative government as part of a drive to control welfare spending, and it became one of the most contested elements of the benefits system. Its removal marks a significant shift in welfare policy and was a long-standing demand of many within the governing party and the wider anti-poverty movement.

The change sits within a broader debate about the future of the welfare state, which has also seen the government commission a review of disability benefits and pause earlier proposals for changes to Personal Independence Payment pending the outcome of that work.

What it means

For affected families, the practical effect is additional support for third and subsequent children, with the expansion of free school meals to follow. The political test will be whether the headline projections are borne out in the official statistics, and whether the cost can be sustained. For now, the government is presenting the package as evidence that, amid the turbulence of recent weeks, it is still able to deliver on a core domestic priority.

Independent analysts will be watching the data closely. Poverty figures are influenced by many factors beyond benefit rules, including wages, housing costs and the wider economy, so isolating the effect of any single policy can be difficult. Supporters of the change argue that the direction of travel is clear; sceptics will want to see the numbers before accepting the more ambitious claims made for the strategy.

The longer-term question is whether the commitment can be maintained through changing economic and political circumstances. Welfare reforms have a habit of being revisited by successive governments, and the cost of abolishing the cap will recur every year. For families relying on the additional support, the hope will be that, having been introduced, the change proves durable rather than becoming another contested element of an ever-shifting benefits system.