Child Poverty Action Group (CPAG) has urged the Scottish government to mitigate “nastiest of policies”.
On the sixth anniversary of the two-child limit, a Child Poverty Action Group (CPAG) survey has found widespread suffering and hardship among families affected by the policy with parents across the UK struggling to meet children’s basic needs as living costs soar.
The two-child limit restricts child allowances in universal credit (UC) and tax credits (worth up to £3,235 a year) to the first two children in a family, unless the children were born before April 2017 when the policy was introduced.
CPAG’s rolling survey, which since 2019 has collected more than 3,000 responses from parents across the UK who are subject to the limit, records a sharp rise in the number of families reporting that the policy has affected their ability to pay for gas and electricity, despite government intervention – from 73% in 2021/22 to 82% in 2022/23.
The number of working families affected by the policy who report that it has affected their ability to pay for food has risen from 78% in 2021/22 to 87% in 2022/23. The rate among non-working households has consistently reached 90% since 2019.
Most families (58%) subject to the policy are working and CPAG estimates that across the UK 1.5million children are currently affected by it, including 1.1m growing up in poverty.
Recent Scottish Government analysis suggests that, in terms of reducing child poverty, the two-child limit would be the most cost-effective UK welfare reform to reverse.
CPAG analysis suggests that mitigating the two-child limit would lift between 10,000 and 15,000 children in Scotland out of poverty and cost around £85m.
John Dickie, director of Child Poverty Action Group (CPAG) in Scotland said: “Six years to the day since this nastiest of policies came into effect, our survey is showing just how devastating its effects are.
“The two-child limit makes it impossible for parents to provide their children with essentials – and the cost of living crisis is adding extra pain. It’s a policy that is undermining the efforts of government in Scotland to reduce child poverty and must be removed as a matter of utmost urgency by UK Ministers.
“In the meantime the new Scottish Government should act to mitigate it as fully as possible before it does more damage to children and to family life.”
The group says the most practical and effective way to address the impact of the two-child limit is through an additional payment of Scottish child payment to all households who have a third, or subsequent, child born after the 6th April 2017.
The impact of the policy on families’ budgets has been compounded by the cost-of-living crisis. While the UK Government has provided support with living costs for low-income households, the payments are flat-rate and therefore take no account of children in a household.
Although benefits will increase in-line with inflation this month, the continued application of the two-child limit means affected families will still be well short of what they need.
Charities said abolishing the two-child limit would lift 250,000 children out of poverty across the UK, and a further 850,000 children would be in less deep poverty at cost of just £1.3 billion.
Unless the policy is abolished, the number of children affected will reach 3 million, as more children are born under the policy.
A UK Government spokesperson said: “The two-child policy means families on benefits are asked to make the same financial decisions as families supporting themselves solely through work, including considering our comprehensive childcare offer for working parents and child benefit for all children.
"There are careful exemptions and safeguards in place within the policy to protect people in the most vulnerable circumstances.”