CPAG and the Church of England have produced a new report on the impact of the two-child limit after three years. Since 6 April 2017, families having a third or subsequent child are no longer entitled to additional support through child tax credit and universal credit.
This report is part of a series of annual reports on the impact of the two-child limit, and is based on a survey of nearly 1,000 families affected by the policy. We estimate that 230,000 families have been affected by the two-child limit by April 2020, and that an additional 60,000 families could be affected as a result of the COVID-19 crisis. By the end of this Parliament, more than 600,000 families are likely to be subject to the limit, pushing an estimated 1.3 million children into, or deeper into, poverty.
Affected families are having to cut back on basic items, including adequate or healthy food, clothes, haircuts and baby equipment. In order to get by, many families report getting into problem debt and rent arrears – a situation they acknowledge is not sustainable. Parents try to shield their children by cutting spending on themselves at the expense of their own mental health and relationships, sometimes pushing families to breaking point. Despite parents’ best efforts, it is clear that this policy is adversely affecting their children’s well-being and development, as family budgets are trimmed and children are unable to join in extracurricular activities or socialise with friends.
The two-child limit predominantly affects working families. Parents say they are unable to compensate for the loss of support by working longer hours, due to childcare costs and pressures on family life, trapping them in poverty.
The two-child limit fails to protect families against the impact of unexpected life events, such as unemployment, family breakdown, ill health, and now COVID-19. This policy denies families the financial support they need from our social security system when they experience tough times, leading to children growing up in hardship. Our government must now lift the two-child limit and help all children to thrive.