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Families on Universal Credit could receive a significant boost of up to £586 a month if the government follows through on plans to scrap the two-child benefit cap.
Currently, the policy limits Child Tax Credit and Universal Credit payments to the first two children in a household, if they were born after April 2017. This means families with three or more children born after that date are excluded from receiving additional means-tested support for those children.
Removing the cap would allow eligible families to receive the full child element of Universal Credit — currently valued at £292.81 per child per month — for each additional child. For example, a family with four children could see their monthly benefits rise by £586 under current rates.
The two-child limit, originally introduced by the Conservative government, has faced criticism for its impact on child poverty. The Resolution Foundation estimates that the cap will increase the number of children living in poverty to 4.8 million by the 2029–30 general election.
Labour Treasury minister Torsten Bell, who previously led the Resolution Foundation, said lifting the cap could help bring 470,000 children out of poverty.
Department for Work and Pensions data shows around 1.6 million children currently live in households affected by the cap.
Education Secretary Bridget Phillipson recently suggested the government is reviewing the policy, though she cautioned that removing it would come at a high financial cost.
