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Labor ready to announce End of two-child benefit cap on wednesday BudgetAfter months of intense pressure from backbenchers, campaign groups and political opponents.
Before the financial event on 26 November, Government insiders have told Independent The Chancellor will scrap the controversial policy to appease disgruntled MPs and promote bad election results.
Rachel Reeves hinted earlier this month He said he doesn’t think it’s right that Labor could scrap the controversial policy Children Are “punished” for being part of large families.
Speaking on BBC Radio 5 Live, the Chancellor said it was important that “our economy doesn’t suffer in allowing children to have children”. poverty He added: “In the end, a child shouldn’t be punished because their parents don’t have a lot of money.”
However, it is reported that the Treasury is also considering ways to make changes to the limit rather than removing it entirely – a move Former Prime Minister Gordon Brown recently warned.
This could be done by increasing the limit to three or four children, or by implementing a taper rate, whereby parents would receive more entitlement for their first child and less for subsequent children.
Here’s everything you need to know about the policy:
What is the two-child limit on benefits?
with two children profit margins Prevents parents from claiming Universal Credit or tax credits for their third child. It was introduced by the Conservatives and came into force in April 2017. This only applies to children who were born after April 6, 2017.
The measure was announced by then Chancellor George Osborne along with other changes to the benefits system. The Conservatives said these measures were designed to encourage benefit recipients “to make the same choices as those who support themselves only through work”.
The latest official figures show that 1.6 million children are living in families affected by the policy. Campaigners, donors and politicians from all walks of life have called on the government to scrap the measure.
This is a separate policy to the benefit cap, also introduced under the then Conservative and Liberal Democrat coalition government, which reduces the amount of benefit a family receives to ensure claimants do not exceed the cap.
What is the effect of the two children’s hats?
Organizations working in this area argue that every day 109 children across Britain are driven into poverty because of this policy.
The number of children living in poor households has been rising steadily over the past decade, with 4.5 million children – almost one in three – now living in poverty.
Poverty can be defined in many ways, but Department for Work and Pensions ,DWP) uses “relative low income” as a marker, which refers to people from households earning 60 per cent of the average income of £36,700 in 2024, or less than £22,020.
According to the Joseph Rowntree Foundation, some of these children are living without essentials like food, heating, clothing or basic toiletries.
Removing the two-child benefit limit could lift 350,000 people out of poverty, according to the researchers’ analysis. Child Poverty Action Group (CPAG).
What loss will the government suffer by ending it?
The estimated costs of removing the two-child limit, increasing it to three children, or removing the household limit vary.
Getting rid of the cap could cost the government £3.5 billion over 2029-2030, think tank the Resolution Foundation estimated earlier this year. Meanwhile, CPAG suggests the move would cost £2 billion.
IndependentThe UK’s own calculations suggest that raising the limit to three children could cost at least £1.3 billion per year, assuming 370,000 families claim an extra £3,513 UC each year.
Despite its unpopularity among voters, successive governments have refused to commit to removing this limit.
Last year, Sir Keir imposed the whip on seven Labor MPs who voted against his party in protest at the two-child benefit limit.
The current Labor government has consistently stated that it will not take action to remove the cap due to a lack of resources in the budget, yet recent reports would strongly suggest that a U-turn is on the cards.