What is the two-child benefit cap and when will it be lifted?

Chancellor Rachel Reeves announced in the Budget that the two-child benefit limit will be lifted from April 2026.

The limit means that many low-income families currently receive no further benefits after their third or subsequent child.

The policy, introduced by former Conservative Chancellor George Osborne, means parents can only claim Universal Credit or tax credits for their first two children.

it applies For third or subsequent children born after April 6, 2017.

A total of 1.6 million children are in large families who cannot claim these means-tested benefits as a result.

According to the Institute for Fiscal Studies (IFS) think tank, if the cap had not been imposed, affected households would have received an average benefit of £4,400 per year. It is estimated that this policy has saved the Exchequer approximately £3.6 billion per year.

Reeves said that “hundreds of thousands of children have been pushed into poverty” since the two-child limit was introduced.

He announced that this limit will be abolished from April 2026.

An estimated 560,000 households will see an average increase of £5,310 per year in Universal Credit in 2029-30.

The government says the measure will lift 450,000 children out of poverty.

According to the Office for Budget Responsibility, lifting the cap would cost £2.3 billion in 2026–27 and £3 billion in 2029–30.

Currently, for example, if you have four children born before April 6, 2017, you will still receive the extra payment. This concerns children under the age of 16, or young people under the age of 20 who are in full-time education or training.

If a parent or one parent has one child, and the next has twins or triplets, a claim can be made for all these children.

A claim can also be made if the children were born after rape or from a forced relationship. Reeves said she would end this “rape clause”, calling it “inhumane and cruel” to women.

Payments can also be made to children who have been adopted into your care rather than into local authority care, or who are children of your child.

More than 100 charity organizations had written a letter to the Chancellor demanding abolition of the two-child limit.

Many backbench Labor MPs also wanted The Chancellor argued for its cancellation, saying that it would lift hundreds of thousands of children out of poverty.

Conservatives supported this limit, saying it made the system more fair and meant that parents receiving benefits faced the same financial choices as parents who funded themselves entirely through work.

Correct. There is often a misconception that the two-child limit affects the payment of child benefit, as this is called the two-child benefit limit.

So, take a breather between “two-kids” and “benefits.”

this is the policy Directed specifically at universal credit and tax credits, not child benefit.