DWP Universal Credit and benefits changes to hand £3,200 to families | Personal Finance | Finance
Everyone with children could be handed a £3,200 a year boost if the government goes ahead with removing the child benefit cap as it is considering.
New Education Secretary Bridget Phillipson has said the government will consider scrapping the two-child cap in a bid to help children out of poverty.
The two child benefit cap means that you get a certain level of benefits or tax credits for having one child, then more for a second child, but having a third child or more gives you no extra money, apart from in some special circumstances like the child is disabled or adopted.
Right now, everyone on Universal Credit and in work can get up to 85 percent of their childcare costs paid for, worth £1,014.63 a month for one child and £1,739.73 for two children – but it doesn’t increase for a third child or more.
For child benefit, right now parents are paid £25.60 per week and another £16.95 on top for a second child, and this has no limit on the number of children, although those earning £60,000 or more will have their benefit ‘tapered’ and lose some of it, up to £80,000 where you don’t receive any child benefit.
DWP research has shown that scrapping the child benefit cap would hand roughly 1.6M children another £288 per month.
The Resolution Foundation claims the impact of the two child cap is worth £3,200 a year.
It said: “In 2023-24, families capped by the two-child limit lose up to around £3,200 a year in benefit support for their third and each subsequent child. Although a range of different families are affected by the two-child limit, disadvantaged groups are disproportionately represented: almost half of the households affected by the two-child limit are single parent families, for example.”
The Education Secretary told Sky News that the change is being considered, but stopped short of confirming it. She said: ““We will look at every measure in terms of how we can address this terrible blight that scars the life chances of too many children.”
She added that it would be “very expensive” and would need to be reviewed as “one of a number of levers in terms of how we make sure we lift children out of poverty.”
Chancellor Rachel Reeves said that the change would only be made if the government could ‘say where the money is going to come from’.
She added: “We were really clear during the election that we were not going to make spending commitments without being able to say where the money was going to come from.
“If we’re not able to say where the money is going to come from, we can’t promise to do it. That’s true when it comes to the two-child limit and anything else.”
