High court finds two-child rule exception perverse

April 20, 2018

The High Court has today ruled that one of the Government’s key welfare reform policies, the two-child rule for tax credits and universal credit (1), is in part unlawful.

Mr Justice Ouseley accepted the claim brought by the Child Poverty Action Group (CPAG) on behalf of one claimant household that the exception to the two-child rule for cared-for children was perverse because it was only available where the cared-for child was the third or subsequent child. As the judge identified: the purpose of the exception is to encourage, or at least avoid discouraging, a family from looking after a child who would otherwise be in local authority care, with the disadvantages to the child over family care which that can entail and the public expenditure it can require.’ Only making the exception available if the cared-for child was not the first or second child was, according to the judge, not rationally connected with the purposes of the legislation and indeed it is in conflict with them.’

The ruling means that all children looked after by family members* claiming tax credits or universal credit will not be taken into account for the purposes of the two-child limit.

Commenting on the ruling, CPAG’s solicitor, Carla Clarke, said:

‘This is an important in-road into a flagship welfare reform policy. The irrationality of limiting the exception for children cared for in kinship arrangements* to third or subsequent children has been raised on numerous occasions by various bodies, yet rather than accepting such legitimate criticisms and removing the restriction, it has required taking the DWP to court for the unlawfulness to be properly recognised.’

CPAG’s wider challenge to the lawfulness of the two-child rule as breaching fundamental human rights to private and family life and to non-discrimination was not accepted by the Court. CPAG intends to appeal that aspect of the ruling.

Ms Clarke said:

‘This is a policy which is not simply about what level of benefits predominantly working families are entitled to. Rather, it is a policy which necessarily encroaches upon very personal and intimate decisions about family size and planning and treats some children as less deserving of a benefit intended to meet their basic needs purely because of their birth order. We do not agree with the judge’s findings on the various human rights arguments and will look to appeal this case further’.


Notes to Editors:

*Corrected at 11.12, Friday 20 April

(1) The ‘two-child limit’ for child tax credit and universal credit came into force on 6 April 2017. Families who claim tax credits or universal credit, which have a third or subsequent child born after 6 April 2017, will no longer be able to claim a child element for this child or any future children. The child element is worth up to £2,780 per year (£232 per month) and until the policy came into effect was payable for all children in low- income families to help protect them from poverty. Families who make a new claim for universal credit from 1st February 2019 will only receive the child element for two children per family, even if the children were born before April 2017.

(2) CPAG was acting for three claimant households. All three of them challenged the overall policy on human rights grounds. Additionally, one of the households challenged the lawfulness of the ordering issue to the exception for kinship care children. More information on the case and a link to the judgment is here.

(3) Analysis by CPAG and IPPR has found that once universal credit is fully rolled out, the two- child limit will result in up to 200,000 additional children in poverty.

(4) The ordering or sequencing issue applies to the kinship care/cared-for children exception, and also to the adoption and non-consensual conception exception. As well as NGOs, the independent Social Security Advisory Committee raised concerns over the ordering issue in correspondence with the former Minister of State for Employment and the Secondary Legislation Scrutiny Committee raised the matter with the DWP.

(5) Richard Drabble QC at Landmark Chambers and Tom Royston at Garden Court North are the barristers instructed in the case.

(6) Last month 60 Bishops from the Church of England and senior representatives from other Christian, Jewish and Muslim organisations wrote to The Times urging the Government to rethink the two-child policy. The Church of England and End Child Poverty Coalition’s report on the policy is here.

Further information from CPAG media contact Jane Ahrends on 0207 812 5216 or 07816 909302