Posted: 06 April 2017

Introduction of '2 child limit' risks cutting support for 3 million children

Today the Government is introducing a new policy limiting Child Tax Credit and Universal Credit, depending on the number of children in the family. We estimate this will affect 3 million children, putting them at risk of illness, poor school results and mental health problems.

What is the 'two-child limit'?

The new rules introduce a two-child limit to Child Tax Credit for children born after 5 April 2017 and the child element of Universal Credit for families making a new claim (whether or not the child is born before April 2017).

What will this mean for families?

Child poverty is already on the rise and we’re concerned about how these cuts will cause many more children to be affected.

The restrictions will mean that every family with three or more children in receipt of tax credits will lose up to £2,780 per year for each additional child.

A nurse with three children, earning £23,000 who becomes a single parent, stands to lose £2,780 a year.

In addition to the two-child limit, the family element of tax credits is being removed for new parents. This is a single payment made per family, worth £545 per year.

In total, this means that a family with three children making a new claim for Universal Credit will lose up to £3,325 (£64 per week).

Who is affected?

We estimate the new restrictions will affect 3 million children, based on there being  currently around 870,000 families across the UK who receive Child Tax Credit for more than two children in the family.

Nearly two thirds (64%) of children who will be affected by the two-child limit, are in low income working families.

The Government expect around 640 thousand families to be affected by 2020 alone. In these families we estimate there to be around 2.2 million children. The map below shows the approximate number of families and children we expect to be affected by the changes.

Use our interactive map to see the estimated number of those affected*

Are there any exceptions?

In a small number of cases children will be excluded from the limit – including some children born as a result of a multiple birth, adopted children and those in non-parental caring arrangements, and those born as a result of non-consensual sex.

What about the Government's pledge to help struggling families?

The Government needs to reconsider their approach to this policy, which threatens to push thousands of children below the poverty line, and is likely to predominantly affect low income working families.

*Map methodology

The latest available Tax Credit statistics indicated that around 872,000 families in receipt of Tax Credits have more than two children in the household.  Our analysis of these figures indicates that there are around three million children living in these families.  

We have provided the regional breakdown of these figures. This gives an indication of the numbers likely to be affected when the policy is introduced. 

By Sam Royston - Policy team

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