Martin Lewis ‘clears up’ three ‘confused’ HMRC and DWP benefit rules | Personal Finance | Finance
Martin Lewis has moved to clear up confusion over two “often mis-explained” HMRC and DWP benefit rules.
The Money Saving Expert (MSE) founder has explained the rules regarding the two-child benefit cap which is often wrongly confused with Child Benefit. The two-child benefit cap relates to Universal Credit and prevents anyone claiming the benefit from getting any additional amount if they have more than two children. According to Department for Work and Pensions (DWP) rules, Universal Credit claimants are entitled to an additional amount for any child born before April 6, 2017. But claimants won’t get any additional payments for a third or subsequent child born on or after April 6, 2017, unless special circumstances apply.
The benefit is sometimes confused with Child Benefit, which is paid by HM Revenue and Customs (HMRC) and is a universal payment that can be claimed by parents or carers responsible for bringing up a child under the age of 16, or under 20 if they stay in approved education or training.
Explaining the confusion over the separate benefits, Martin Lewis wrote on X (formerly Twitter): “What is the two child benefit limit? It’s in the news and often mis-explained, as people confuse three things, so here’s a quick primer.
“1. It is nowt to do with Child Benefit, a universal payment for every child you have (clawed back from higher earners)
“2. The two-child benefit limit, often wrongly called a Cap, means those who get Universal Credit (a benefit for those in and out of work on lower incomes) won’t get any additional benefit if they incur extra costs because they’ve more than two children. This is the one in the news right now.
“3. Separately there is also a Benefits Cap – which, in simple terms is a max amount you can get on benefits (including Universal Credit and Child Benefit). The cap for families, couples and single parents is £1,835/mth. Its more in greater London.
“So there you go. You’ve got Child Benefit rules, the two-child limit for Universal Credit and Tax Credits, and a benefits cap. There are lots of ifs and buts. I hope that helped clear it up a bit.”
The explanation comes amid suggestions Labour could lift the two-child benefit cap for Universal Credit claimants in the October Budget.
The Times reported on Wednesday that the child poverty taskforce, set up by Sir Keir Starmer, will recommend lifting the two-child cap and this is expected to happen before the Budget.
In a statement, the DWP said the child poverty taskforce would publish an “ambitious” strategy aimed at the causes of child poverty, but a government source said work remained ongoing and no final decisions had been made.
During a visit to Telford on Thursday this week, Chancellor Rachel Reeves said: “Of course as a Labour Chancellor I’m determined to lift children out of poverty and we’ve made a commitment that in our time in office there will be fewer children in poverty at the end of this parliament than at the beginning.”
She added: “The child poverty task force is doing its work at the moment. That will report shortly and of course I will respond in the Budget.
“Am I determined to lift children out of poverty? Absolutely. That is what Labour chancellors do and that’s what this government will do as well.”
