Dwp child benefit cap 'tweak' could make uk households £4,300 better off

SIR KEIR STARMER TOLD A PRESS CONFERENCE ON THURSDAY THAT HE WAS LOOKING AT “ALL OPTIONS” TO DRIVE DOWN CHILD POVERTY WHEN ASKED IF HE WOULD LIKE TO GET RID OF THE TWO-CHILD BENEFIT CAP.

10:12, 01 Jun 2025 The Department for Work and Pensions (DWP) and Labour Party government is considering tweaks to soften controversial welfare cuts before a crunch vote in parliament next

month. Labour Party leader Sir Keir Starmer told a press conference on Thursday that he was looking at “all options” to drive down child poverty when asked if he would like to get rid of the

two-child benefit cap. “One of the proudest things that the last Labour government did was to drive down child poverty, and that’s why we’ve got a taskforce working on this,” he said. “I

think there are a number of components. There isn’t a single bullet.” READ MORE LLOYDS BANK BRINGS IN BIG CHANGE AND ANYONE WHO IS IN A 'COUPLE' WILL BENEFIT Bridget Phillipson

said to those charities that have been campaigning for an end to the restriction: “We hear them … We want to make this change happen, and it will be the moral mission of this Labour

government to ensure that fewer children grow up in poverty.” “It’s why I’m in politics. It’s what this Labour government is all about. We will make different decisions to support children

and families,” she said. Article continues below “That is the moral purpose of this Labour government. We are determined to bring down the numbers of children growing up in poverty. I know

myself the impact it has. I’ve experienced it myself growing up. So it’s really personal to me.” According to a report from the Institute for Fiscal Studies (IFS) released in 2024, this

could be worth as much as £4,300 per household on average. It said: “Low-income families typically receive an additional £3,455 a year of universal credit (or child tax credit) for each

child they have. But the ‘two-child limit’ means that claimants do not receive an additional amount for third or subsequent children born after 5 April 2017. “To illustrate the impact of the

policy, take a lone parent with three children who lives in social rented accommodation costing £500 per month, and not working. Their universal credit entitlement will be made up of the

basic £4,721 per year in universal credit for single adults; £6,000 to cover the cost of their housing; and – in the absence of the two-child limit – £10,365 for their children. “On top of

this, they receive £3,102 a year in child benefit, which is unaffected by the two-child limit, giving them a total income of £24,188 (without the two-child limit); they would also generally

have support to cover most or all of their council tax bill. “The two-child limit means they receive £3,455 less each year in universal credit, representing a 14% cut to their income and

putting them into relative poverty. Article continues below “Turning to the impact across the population, we find that, when fully rolled out, on average affected households will lose £4,300

per year, representing 10% of their average income and 22% of average benefit income.”