Two-child limit will put 300,000 more children into poverty by the time universal credit fully rolled out, charity warns

Tens of thousands more children will be tipped into poverty by the time universal credit is fully rolled out because of the government’s two-child limit, a charity has warned.

On the second anniversary of the policy, Child Poverty Action Group (CPAG) has claimed an additional 300,000 children will be living in poverty by the time the new benefit payment is fully implemented in 2023-24.

The two-child limit, which restricts child allowances in universal credit and tax credits to the first two children in a family, has already affected about 150,000 families with children aged under two, according to CPAG.

It does not apply to third or subsequent children born before the policy was introduced in April 2017, those in kinship care, adopted children, or third or subsequent children conceived as a result of non-consensual sex.

CPAG warned 43 per cent of children in families with three or more children already live below the poverty line, compared to a 30 per cent child poverty rate overall.

Two-thirds of families affected will be working, it said, and many families who were not claiming tax credits or universal credit when they decided to have their third child will be affected by the two-child limit if they fall on difficult times, such as becoming unable to work due to illness or losing their partner.

A single parent with three children working 16 hours per week on the national living wage of £8.21 per hour would have to more than double their hours to 37 per week – or even more if they have to pay for childcare – to compensate for the effect of the two-child limit, according to the charity.

The organisation has also claimed the policy breaches the UN Convention on the Rights of the Child and unlawfully discriminates against children because it “no longer treats them as worthy of individual consideration for entitlement to subsistence benefits”.

Alison Garnham, chief executive of Child Poverty Action Group, said: “The government recognises that investment in the early years is crucial for children’s development. Yet the result of current policies is that the face of poverty is getting younger – with the latest figures showing that 53 per cent of poor children are aged under five.

“The two-child policy is out of step with our national commitment to children and to family life. It is foisting misery on families, with parents telling us they can’t afford basics like baby milk, nappies, clothes for their children or transport to take sick children to medical appointments.

“It should be abolished in line with our shared belief that every child matters.”

A spokesperson for the Department for Work and Pensions said: “The two child policy ensures fairness between claimants and taxpayers who support themselves solely through work.

“Appropriate exceptions and safeguards are in place and we recently announced that the policy won’t be applied retroactively for children born before 6 April 2017.

“We remain determined to tackling child poverty and we’re taking action to help families with the cost of living, including increasing the national living wage and doubling free childcare for three and four year olds.”

Universal credit is a new benefit which rolls six individual benefits into one monthly payment, including Employment and Support Allowance, Jobseeker’s Allowance, Housing Benefit and Child Tax Credit.

However, the scheme has proved highly controversial, with some critics arguing delays in payments were leaving some claimants at risk of homelessness and destitution.