Labour is reportedly contemplating eliminating the two-child benefit limit. This cap, introduced by the Conservatives in April 2017, restricts Universal Credit and Child Tax Credit to the first two children in most households. Critics argue that this restriction exacerbates poverty by withholding support from struggling families.
Data from the Department for Work and Pensions reveals that nearly 1.7 million children in 469,780 households are affected by the two-child limit. Despite speculation, Labour has not yet made an official decision on any changes to the benefit system. Any potential alterations are likely to be announced during the Autumn Budget on November 26.
Government officials have emphasized that no final decisions have been reached. Reports suggest that the two-child benefit limit could be replaced with a new system where parents receive diminishing benefits for each additional child. The Treasury is also exploring options such as limiting additional benefits to three or four children or lifting the cap exclusively for working parents on Universal Credit.
Chancellor Rachel Reeves has been cautioned by Treasury officials that completely removing the two-child benefit cap could incur a cost of around £3.5 billion. When asked about the cap at the Budget, Reeves stated that policies to reduce child poverty will be outlined in due course.
Prime Minister reiterated his commitment to reducing child poverty and expressed personal determination to achieve this goal under his leadership. The government’s focus on combating child poverty remains a priority.
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