Two Child Benefit Cap: Check out What is it & Amendment in Scrap Policy

Two Child Benefit Cap: Since 1946, UK governments have offered financial assistance to help with the costs of raising children. However, in recent years, family payments have faced increasing scrutiny. In 2017, the Conservative government imposed a limit on the number of children, for whom families can receive benefits, capping it at two. This two-child benefit cap is often criticized for disproportionately affecting the poorest members of British society and has sparked significant discontent among politicians, public figures, and anti-poverty advocates.

There were hopes that the Labour Party, if it gained power, would overturn this Two Child Benefit Cap. Labor Prime Minister Keir Starmer and Chancellor of the Exchequer Rachel Reeves have been hesitant to tackle the issue. While they recognize the alarming levels of child poverty in the UK, they have pointed to the country’s financial difficulties and the costs associated with expanding the benefits system.

Two child benefit cap: an overview

• The two-child benefit cap restricts state financial support, including Universal Credit and child tax credits, to two children per household.
• This cap was implemented by the Conservative government in April 2017 as part of a broader austerity initiative.
• It applies to all children born after the specified date, limiting benefits for families with more than two children.
• The two-child benefit is a distinct government program designed to provide financial assistance to families.
• It is linked to income-based benefits, such as Universal Credit, affecting eligibility for additional support.
• Families with more than two children born after April 2017 will not receive extra financial benefits for those additional children.
• Changes to the two-child benefit cap also reflect adjustments in the costs associated with raising children.
• If both parents are employed, children may receive benefits until they reach 16 years of age.
• If both parents are students, benefits can extend until the child turns 20 years old.
• Various factors, including income, the child’s living situation, and future employment costs, influence the amount of child benefits received.

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Amendment in scrap policy

• The SNP has proposed an amendment to the King’s Speech aimed at eliminating the two-child benefit cap. 
• This cap prevents parents from receiving benefits for their third child, pushing many families into poverty. 
• Plaid Cymru MPs are expected to support Stephen Flynn on this issue. 
• The government estimates that the UK Two-Child Benefit Cap will result in approximately four million children living in poverty, an increase of 700,000 since 2010. 
• Recent reports indicate that 1.6 million children may be impacted by the Department for Work and Pensions’ initiative to abolish this policy. 
• A new government task group has taken charge of efforts to combat child poverty. 
• However, not all charities are in agreement, arguing that good intentions alone are insufficient for an effective strategy. 
• There is also a suggestion to impose a limit on the two-child bonus that was previously removed. 
• Families with three children born after the policy change will not receive the £3,500 annual benefit that earlier families do. 
• The debate continues as stakeholders assess the implications of these proposed changes on child welfare. 

Why the policy is so controversial?

• Anti-poverty advocates opposed the cap on child benefits. 
• The Child Poverty Action Group in Scotland estimated that removing the cap would cost £1.3 billion and could lift 250,000 children out of poverty in the UK, including about 15,000 in Scotland. 
• Lynn Perry, chief executive of Bernard’s, labeled the cap as a major contributor to child poverty and called for its elimination. 
• Research from the Resolution Foundation revealed that 60% of families impacted by the two-child limit were already employed. 
• The policy also sparked debate over the so-called “rape clause.” 
• An exception allowed for children conceived through “non-consensual conception.” 
• Critics accused the UK government of subjecting rape victims to additional trauma by requiring them to prove their circumstances to access benefits. 
• The Conservative Party maintained that the system protected women who had children as a result of rape from losing tax credits. 
• Recent data from the Department for Work and Pensions indicated that approximately 200 households in Scotland received exemptions due to non-consensual conception. 
• Campaigners challenged the two-child limit legally, claiming it violated the human rights of parents and children, but the Supreme Court rejected their case in 2021. 

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What else could be done to ease the poverty?

• Explore additional strategies to alleviate child poverty.
• Focus on increasing the income of families with children in poverty.
• Historical events like the pandemic and the 2008 financial crisis highlight the effectiveness of the benefits system.
• Consider lifting the benefit cap, which limits total benefit support for families.
• The current benefit cap is £25,323 for couples and £16,967 for singles in London, with lower amounts outside the city.
• The benefit cap disproportionately impacts families with children, and removing it could cost an extra £500 million this year.
• Address the decline in the real value of base benefits, which has decreased by 7.6% since 2010.
• Recognize that current benefits are often insufficient for families in need.
• Enhance employment support for parents of children living in poverty through Job centers.
• Invest in free childcare to help more parents enter the workforce.