Doubly punished: 1 in 4 hit by benefit cap and two-child limit

The effects of the cost of living crisis are stark: teachers handing out toothpaste to children who have none at home; the toll on mental health caused by a constant struggle to get by without enough; and the explosion in demand for over-stretched food banks. But these harms are multiplied by the benefit cap and two-child limit, flagship policies of the welfare reform agenda which sharply sever the relationship between need and support provided by our social security system. 

While the benefit cap imposes an arbitrary limit on the income a household can receive in social security (regardless of family size and need), the two-child limit restricts targeted support to the first two children in a household, affecting new births from April 2017. Both policies cause real and lasting harm at any time, but their endurance in this cost of living crisis places almost unbearable pressure on affected families. 

Remarkably, and worryingly, our research shows that over one in four families who are benefit capped are also subject to the two-child limit. In March last year (the latest date for which statistics are available) over 30,000 families were hit by both policies at once; affecting more than 110,000 children. Behind each of these statistics is a family forced to struggle to get by on much, much less than they need, creating perpetual and everyday crisis. 

Being hit by both policies at once means that families are being punished twice for having greater needs, whether that’s higher rent costs or having more than two children. Many families affected by the benefit cap are lone parent families, often with very young children and/or children with disabilities. Or the parents face health difficulties of their own. These limit families’ abilities to ‘escape’ the cap through paid work. The combined impact of the policies means the family’s income can fall hundreds of pounds a month short of what is needed to get by. The two-child limit applies regardless of how much paid work parents are doing. The ways the two policies interact also means that families may receive no support at all for a third or subsequent child as the additional child benefit they receive is clawed straight back through the benefit cap, an especially cruel aspect of this regime. 

Since 2021, we have been walking alongside families affected by the two-child limit and the benefit cap, speaking to some who have been affected by both policies. Families like Jessica’s, a single mother with four children. Jessica receives £237 less per month as a result of the two-child limit, and is capped by £500 a month after her small business as a massage therapy collapsed during the pandemic. After she’s paid her rent, Jessica is left with just £60 a week to live on. Unsurprisingly, Jessica describes this as a ‘constant fight and struggle’. Jessica has to rely on food banks and food parcels and misses being able to cook fresh food with her children:  

I’d just love to be able to go food shopping and buy proper food. 

Like Jessica, Melissa feels her children miss out on things every day because of the household’s financial situation. She describes having to refuse requests to take part in extracurricular activities, something which so many children take for granted: 

Sometimes… my son wants to go to football club after school and that. So sometimes he’ll come out of school and say “Mum, can I go to that?” And I’ll just say to him “Well I’ll see if I can afford it” or “I can’t really afford it right now.” And he has a little huff...

Both the two-child limit and the benefit cap cause real and unnecessary harm. Worryingly, every year that the two-child limit remains in place more and more children will be affected by it, as more children are born into a UK that sees fit to punish them for having more than one sibling. Analysts describe the two-child limit as a major driver of rising child poverty. 

The continuing existence of these policies is a choice, a choice that can and should be reversed. Some are already making the choice to forge a different path: the Scottish government is mitigating the benefit cap for families in Scotland as far as possible.

Next time you hear a headline of families forced to do without because of the cost of living crisis, think too of the systemic policies that underpin this hardship for many families, and join us in calling for them to be abolished, a vital first step to a better future for us all.

The project has been funded by the Nuffield Foundation, but the views expressed are those of the authors and not necessarily the Foundation. Visit https://nuffieldfoundation.org.