More than one million children in working families are set to be affected by the two-child benefit cap, new analysis has revealed, as Labour faces renewed pressure to scrap the controversial policy.
Despite having at least one parent in work, thousands of families are struggling to afford the essentials as key benefits don’t extend to their third child or beyond, a report by the Child Poverty Action Group (CPAG) has found.
The cap, introduced under Conservative welfare reforms, blocks parents from claiming the child element of universal credit worth £292.81 a month for a third or subsequent child born after April 2017.
Latest figures show that around 1.7 million children are now affected by the policy, with CPAG estimating it will reach one million children in working families alone in October. This means that around 60 per cent of affected households contain at least one working parent.
Research by the anti-poverty charity points out that a lone parent with three children who works full-time on minimum wage is currently £4,500 a year under the poverty line. If the two-child benefit cap were scrapped, they would be £3,500 better off, at £1,000 a year under the line.
Even a lone parent in this situation on median earnings is £2,000 under the poverty line, the findings show, while scrapping the cap would put them £1,500 over the line.
CPAG has renewed its call for the government to scrap the controversial measure, pointing out that it would “immediately” lift 350,000 children out of poverty, at a cost to the Treasury of £2 billion.
The charity’s chief executive, Alison Garnham, said: “The two-child limit has parents dancing on a pin – trying to work as much as they can, raise their children, and pay the bills – but the sums don’t add up.
“These are the families that work in our schools, our hospitals, our job centres and services and the strain of the two-child limit on them is intolerable.
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“Government must commit to scrapping the policy in its forthcoming child poverty strategy or there will be more children in poverty at the end of this parliament than when it took office.”
Shauna and her partner have three children, but under the two-child limit, their youngest does not receive universal credit support. She left her job last year to care for her autistic son, while her husband works full-time.
“The two-child limit is the difference between us being in debt and not. We have utilities debt and at the end of the month have to use credit cards just to keep living,” she said.
“I didn’t expect to be on universal credit. No one would want to be, and I don’t plan to be on benefits for ever. But nobody knows what’s going to happen to them.”
Another affected parent, who remains anonymous, said: “I’m a taxpayer and my children will grow up and pay tax but when they need support now, they’re deserted.”
The findings from CPAG come as the government faces renewed calls from both opposition and backbench Labour MPs to scrap the two-child benefit cap.
Last week, a group of 33 MPs led by Labour member Kim Johnson wrote to the government to call for an end to the “devastating” policy. This was followed by a similar letter led by Steve Darling, the Liberal Democrat work and pensions spokesperson, alongside 55 MPs.
The government will be publishing its delayed strategy to tackle child poverty later this year, which it has said will be “ambitious”.
Responding to the CPAG report findings, Mr Darling told The Independent: “This valuable evidence from the CPAG affirms what Liberal Democrats have been saying for many years: the two-child cap is cruel and has to end. It punishes children for circumstances entirely beyond their control, and is pushing more families into deeper and deeper poverty every year.
“The chancellor has an opportunity this autumn to do the right thing and commit to ending the cap within the new budget, as Liberal Democrat colleagues and I recently wrote to implore her to do.
“The upcoming child poverty strategy won’t be worth the paper it is written on if it does not include a meaningful commitment to ending the cap. Anything less will only lead to the cycle of children being pushed into poverty continuing.”
A government spokesperson said: “Every child, no matter their background, deserves the best start in life. That’s why our child poverty taskforce will publish an ambitious strategy to tackle the structural and root causes of child poverty.
“We are investing £500 million in children’s development through the rollout of Best Start Family Hubs, extending free school meals and ensuring the poorest don’t go hungry in the holidays through a new £1 billion crisis support package.”
