Chancellor promises action on child poverty in Budget

Chancellor Rachel Reeves has hinted that the two-child benefit cap could be scrapped in the Budget.

Since April 2017, parents have only been able to claim child tax credit or universal credit for a maximum of two children per household.

But in recent weeks, there has been widespread speculation that the cap could be abolished, and ministers have repeatedly refused to rule it out.

And now the chancellor has gone a step further, saying: “I don’t think it’s right that a child is penalised because they are in a bigger family through no fault of their own."

Speaking to BBC Radio 5 Live’s Matt Chorley, she said children also shouldn’t lose out because their parents don’t have very much money.

“In many cases, you might have a mum and a dad who were both in work, but perhaps one of them has developed a chronic illness,” Reeves commented.

“Perhaps one of them has passed away.

“There are plenty of reasons why people make decisions to have three, four children but then find themselves in difficult times.”

The chancellor added: “The last Labour government reduced child poverty and we will reduce child poverty as well.”

When could an announcement be made?

If the government does decide to change the two-child limit, it’d be likely to be announced in the chancellor’s Budget on 26 November.

What could replace the two-child benefit cap?

The Guardian recently reported that the government is currently looking at three possible options:

• increasing the cap so benefits are limited to three or four children
• a tapered rate, where parents would get the most for their first child and less for subsequent children
• lifting the cap for working parents on universal credit, to encourage more people into the workforce

Find out what benefits you can claim

If you’re struggling to cover your day-to-day expenses because of the two-child benefit cap, we can check you’re getting everything you’re entitled to.

So get in touch or try our benefits calculator to see what support you could be eligible for.