The two-child limit

Issue 257 (April 2017)

From 6 April 2017, a two-child limit applies in child tax credit (CTC) and means-tested benefits. Mark Willis and Simon Osborne describe the rules.

Introduction

From 6 April 2017, awards of CTC and universal credit (UC) may not include child elements for a third or subsequent child. Related restrictions apply to personal allowances for children in housing benefit (HB) and – in the few cases that still include amounts for children – income support (IS) and income-based jobseeker’s allowance (JSA). This is known as the ‘two-child limit’.

This limit does not apply to child benefit or, for example, to increases for disabled children, childcare costs, UC/HB size criteria or the ‘bedroom tax’.

In brief

  • In CTC (and IS/income-based JSA), the limit only applies to a third or subsequent child born on or after 6 April 2017.
  • In UC and HB, the limit applies from 6 April 2017, but transitional protection applies to (in general) third or subsequent children born before 6 April.
  • Exceptions provide that the limit does not apply to certain children.
  • Until 1 November 2018, first-time claimants of UC with three or more children are directed to claim CTC instead.

Child tax credit

The two-child limit applies to a third or subsequent child born on or after 6 April 2017.1 Child elements are payable for:

  • the first and second child in the claimant’s household in any case in which there are no more than two children; and
  • any child born before 6 April 2017; and
  • a third or subsequent child born on or after 6 April 2017 to whom an exception applies.

Universal credit

The two-child limit applies so that the child element may not be payable for a third or subsequent child in any award from 6 April 2017.2 Child elements are payable for:

  • the first and second child in the claimant’s household; and
  • the third and any subsequent child if:

            – the child was born before 6 April 2017 and is transitionally protected; or

            – an exception applies in relation to that child.

Transitional protection in UC

Transitional arrangements provide that:3

  • between 6 April 2017 and 31 October 2018 inclusive, those with three or more children claiming UC for the first time, or more than six months after the end of a previous award, or more than one month after the end of a couple claim after becoming single, cannot get UC. Instead, they are able to get CTC and other ‘legacy’ benefits;
  • between 6 April 2017 and 31 October 2018, those who do get UC remain entitled to a child element for any third or subsequent child born before 6 April 2017, provided there are at least two other children born before 6 April 2017 for whom the claimant (or her/his partner) was already responsible;
  • from 1 November 2018, UC includes a child element for a third or subsequent child where the child was born before 6 April 2017, and:

            – on 31 October 2018, the claimant or her/his partner was entitled to UC and was responsible for the child; or

            – from 1 November 2018, the claimant or her/his partner was getting a child element for the child in UC or CTC within the previous six months; and

            – there are at least two other children born before 6 April 2017 to whom the above applies and for whom the claimant or her/his partner was already responsible.

Examples

Rose and Nelson have three children, all born before 6 April 2017. They claim UC for the first time on 1 June 2017. They cannot get UC and are directed to claim CTC (and other legacy benefits) instead. As all their children were born before 6 April, the two-child limit does not apply to any of the children in their CTC award.

Joss has a current award of UC from 10 March 2017. She has three children all born before 6 April 2017. All three children are transitionally protected so the two-child limit is not applied. However, when Joss has a fourth child in June 2017, the two-child limit means that she cannot get a child element for that child, unless an exception applies.

Housing benefit

The two-child limit applies so that a personal allowance may not be payable for a third or subsequent child in any award as from 6 April 2017.4 A personal allowance is payable for:

  • the first and second child in the claimant’s household; and
  • any child for whom a child element is included in an award of CTC; and
  • a third and any subsequent child if:

                  – the claimant is transitionally protected;

                     or

                   – an exception applies in relation to the child for the purposes of a claim for CTC.

Transitional protection in housing benefit

Transitional rules provide that someone entitled to HB with three or more children included in their award on 5 April 2017 is not subject to the two-child limit until they:5

  • make a new claim for HB, or
  • become responsible for another child. In this case, the two-child limit does not apply to a third or subsequent child already in the claim on 5 April 2017 – the limit applies only to the new child(ren).
Example

Usha has two children in her HB claim from December 2016. On 10 April 2017, she gives birth to a third child. No transitional protection applies regarding the new child, as that child was not included in the claim on 5 April. The two-child limit means that Usha does not get a personal allowance for her new child, unless she gets one for that child in her CTC – ie, because an exception applies.

Income support and income-based jobseeker’s allowance

In IS/JSA, where child amounts can still be included at all, the limit applies to a third or subsequent child born on or after 6 April 2017.6 Personal allowances are payable for:

  • the first and second child in the claimant’s household; and
  • any child born before 6 April 2017; and
  • a third or subsequent child born on or after 6 April 2017 to whom an exception applies.

Third or subsequent child

The order of children – ie, whether the child is the first, second, third or subsequent child included in the claim – is determined by allocating each child a date as follows:7

  • if the claimant or her/his partner is the parent of the child, the child’s date of birth; or
  • in any other case, the date the claimant or her/his partner became responsible for the child.

The order of children is usually decided according to the earliest of these dates – ie, the child with the earliest allocated date is the ‘first child’, and so on. However, the order of children must be decided to ensure that the claimant receives the highest number of child elements, if:

  • the date for two or more children is the same date; or
  • the claimant gives birth to a child less than 10 months after becoming responsible for another child under a non-parental caring arrangement.

In these situations, the child under a non-parental caring arrangement is deemed to be the ‘third or subsequent child’ so that the exception can apply.

If an older child no longer counts as a qualifying young person, s/he is no longer included in the claim, so an amount can become payable for a younger child – ie, where that younger child was previously the third child but becomes the second child included in the claim.

Exceptions

The two-child limit does not apply to a third or subsequent child in the following circumstances.8

Multiple births

This applies to a child born in a multiple birth, other than the first child in a multiple birth where the claimant is already responsible for two or more children. Where the claimant has:

  • no older children, s/he gets the child element for all children in a multiple birth;
  • one older child, s/he gets the child element for all children in a multiple birth;
  • two or more older children, s/he gets the child element for all but one of the children in a multiple birth.
Example

Jane has two children born before 6 April 2017. On 10 April, she gives birth to twins. They are her third and fourth children. However, as they were born in a multiple birth, the two-child limit applies only to one of them. Jane gets a total of three child elements.

Adoption

This applies to a child who has been adopted from local authority care, or placed with the claimant for adoption. This exception does not apply if:

  • the claimant or her/his partner was a step-parent of the child immediately prior to the adoption;
  • the claimant or her/his partner has been a parent of the child (other than by adoption) at any other time;
  • the child is adopted directly from abroad.
Non-parental caring arrangements (kinship care)
  • For CTC, an exception applies for a child whose parent is a child or qualifying young person for whom the claimantis responsible.
  • For UC, an exception applies for a child whose parent is a child under 16 for whom the claimant is responsible.
  • For a child for whom the claimant is a ‘friend or family carer’, an exception applies if the claimant or her/his partner is not the parent or step-parent of the child, and:

                 – s/he is named in a child arrangements order under section 8 of the Children Act 1989 or a residence order under Article 8 of the Children (Northern Ireland) Order 1995, No.755 as              a person with whom the child is to live;

                – s/he is the appointed or special guardian, or is entitled to guardian’s allowance, for the child;

               – s/he has a kinship care order under section 72(1) of the Children and Young People (Scotland) Act 2014, or parental responsibilities or rights under section 80 of the Adoption and Children (Scotland) Act 2007 for the child;

               – any of the above points applied immediately prior to the child’s 16th birthday and s/he continues to be responsible for the child; or

               – s/he has undertaken care of the child in circumstances in which it is likely that the child would otherwise be looked after by a local authority.

Rape or coercive or controlling relationships (‘non-consensual conception’)

An exception applies to a child who is likely to have been conceived as a result of rape or in a coercive or controlling relationship. The claimant must not be living at the same address asthe allegedperpetratoratthe time the exception applies. A controlling or coercive relationship includes behaviour which causes the claimant to fear, on at least two occasions, that violence will be used against her/him, or that causes her/him serious alarm or distress which has a substantial adverse effect on her/his day-to-day activities. The claimant must provide evidence from an ‘approved person’ that s/he had contact with her/him or another approved person about the rape or coercive or controlling relationship. Alistofapprovedpersonsistobe set out in guidance but is expected to include healthcare professionals, police officers, social workers, registered counsellors, independent sexual violence advisers or other approved organisations such as specialist rape charities.9

The requirement to provide third-party evidence does not apply if there has been a conviction for rape or coercive controlling behaviour in the UK or abroad, or an award in respect of a sexual offence, physical abuse or mental injury, under the Criminal Injuries Compensation Scheme, and it is likely that the offence or injury resulted in the conception. For CTC, the claimantcan be treated as having provided evidence of the abuse if s/he has already provided it to the DWP in relation to UC, IS or JSA. For UC, s/he can be treated as having provided evidence if s/he has already provided it to HM Revenue and Customs in relation to CTC.

Certain exceptions for step-parents

A third or subsequent child can continue to be excepted from the two-child limit if the claimant is the step-parent of the child, in certain circumstances. The rules are detailed, but concern where the claimant was previously entitled to CTC or UC (or, more rarely, IS or income-based JSA) with a parent of the child, an exception to the two-child limit applied regarding the child, and the claimant is responsible for the child now.

 


 

Please be aware that welfare rights law and guidance change frequently. Older Bulletin articles may be out of date. Use keywords or the search function to find more recent material on this topic.

  • 1. The Child Tax Credit (Amendment) Regulations 2017, No.387 (‘CTC Amendment Regs’)
  • 2. The Social Security (Restrictions on Amounts for Children and Qualifying Young Persons) Amendment Regulations 2017, No.376 (‘UC etc. Amendment Regs’)
  • 3. Reg 3 UC etc. Amendment Regs
  • 4. Regs 7 and 8 UC etc. Amendment Regs
  • 5. Reg 9 UC etc. Amendment Regs
  • 6. Reg 6 UC etc. Amendment Regs
  • 7. Reg 5 CTC Amendment Regs; reg 2 the UC etc. Amendment Regs
  • 8. Reg 5 CTC Amendment Regs; reg 2 the UC etc. Amendment Regs
  • 9. Guidance now available at www.gov.uk/government/publications/support-for-a-child-conceived-without...