The two-child benefit cap is being axed from Monday (Image: Getty)
The controversial two-child benefit cap will officially be scrapped from Monday, April 6 – handing affected households at least £3,500 extra per child. The Labour government has taken the decision – not universally welcomed – to end the so-called ‘two child’ cap on benefits for families which it says will lift 450,000 children out of poverty.
Since 2017, families on low incomes claiming Universal Credit from the DWP could only receive the ‘Child Element’ – which is an uplift for those on Universal Credit who have children – for their first two children. Those who had three, four or five children were barred from claiming any extra money beyond the second child.
According to charity Save The Children, the decision to cap the benefit at two children affected 1.7M households. Confusingly, the two-child benefit cap is not the same as Child Benefit. This cap specifically relates to Universal Credit and the Child Element of it. Child Benefit is still increased for every additional child with no limit on the amount of children you can claim for.
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On top of this, the overall Benefits Cap also remains in place. The cap is a limit on the total income households can receive from all benefits combined, and for 2026-27 will be set at £25,323 a year for couples with or without children inside London and £22,020 outside London. The Benefits Cap covers all child related benefits, though some other benefits like the state pension, PIP and Carer’s Allowance are not included in the overall Benefits Cap.
Save The Children explains in its guidance: “Since 2017, families on low incomes and claiming Universal Credit could only claim for their first two children – this is called the Child Element of Universal Credit (and is different to Child Benefit). With a change in law, families will now be entitled to the full Child Element of Universal Credit – for every child, not just the first two.
The Institute for Fiscal Studies, the End Child Poverty coalition, and the Resolution Foundation have all identified scrapping the two-child limit as the single most impactful step the government could take to reduce child poverty.
“Families already receiving Universal Credit should have their claim automatically updated from April 2026. If parents do not see this change in April or May 2026 (depending on their assessment period), they can use their Universal Credit online journal to raise the issue, or contact the Universal Credit helpline.”
According to Save The Children’s figures, the ending of the cap is worth £3,500 for each additional child.
It says: “£3.5k per year is the value of the Child Element of Universal Credit per child that was previously denied to third and subsequent children – this means that third and subsequent children will now be entitled to receive £3.5k each per year.”
Both Conservative leader Kemi Badenoch and Reform leader Nigel Farage have vowed to reinstate the two-child cap if they are elected in future.
Reform’s Treasury Minister Robert Jenrick said in February: “We want to help British working families to have more children but, right now, we just cannot afford to do so with welfare.”
Save The Children adds: “The full cost of scrapping the two-child limit is around £3 billion per year. But according to research by Professor Donald Hirsch in The Cost of Child Poverty 2023 report, child poverty costs the UK economy approximately £39 billion per year – through poor health, lower educational attainment, and reduced employment in later life. Therefore, child poverty costs the taxpayer more than ten times the cost of scrapping the two-child limit.”