Two-child limit: one year on

01 April 2018
Issue 263 (April 2018)

Kirsty McKechnie sets out what CPAG’s Early Warning System has been learning about the first year of the operation of the ‘two-child limit’ in means-tested benefits.


It is one year since the ‘two-child limit’ was introduced, restricting additional amounts of tax credits or universal credit (UC) paid to support children to the first two children in a family, unless an exemption applies. CPAG’s Early Warning System has been monitoring the impact of this policy closely.

In child tax credit(CTC) claims, the two-child limit only applies to third or subsequent children who are born on or after 6 April 2017. People with three or more children have not been able to make a new claim for UC since this date, but instead have been directed to claim tax credits. The two-child limit has applied to UC since 6 April 2017, subject to transitional protection. Since then, claimants already on UC who then have a third or subsequent child are subject to the limit, unless an exception applies.


Case studies indicate that claimants and staff administering benefits are sometimes confused as to how the two-child limit should be applied. We have a number of examples of families in UC full service areas, with three or more children being advised that they must claim UC, thus delaying their claim for tax credits. Housing benefit (HB) departments in different local authorities have sometimes been incorrectly limiting HB awards to two children, when in fact child elements are in place for all the children in the tax credits award.

In one case, confused by the two-child limit, a lone parent did not report the birth of her fourth child to HMRC. The child was born prior to April 2017 and would not have been affected, but the family lost out on a significant amount of child benefit and tax credits as a result of the delay in notifying the baby’s birth.

Who is affected?

Case studies gathered by the Early Warning System tell us who is being affected by different social security reforms. In relation to the two-child limit, we have collected the following examples.

  • People who could ‘afford’ to have another baby when the third or subsequent child was conceived but who experienced a change of circumstances before the baby was born, which led to the family claiming tax credits or UC, for example redundancy and relationship breakdown.
  • People who are already claiming UC who do not receive additional amounts for new babies born after 6 April 2017.
  • In one case, a parent thought that she would be exempt from the two-child limit because her first child was conceived without consent when she was a teenager. She currently has two children but would like to start a family with her new partner. She will not receive additional money for the new baby because the ‘rape clause’ only applies to third and subsequent children who were conceived without consent and not to first and second children, limiting the number of children a mother may plan to have following the birth of a child conceived without consent.

Looking ahead

From 1 February 2019, families with three or more children who wish to make a new claim for benefit will be directed to claim UC rather than tax credits. Some of the cases gathered by the Early Warning System highlight families who will be affected by the two-child limit in UC in the future.

  • Currently, the two-child limit will not affect a family with more than two children, all born before 6 April 2017, who until recently had no recourse to public funds, but have recently been granted leave to remain. This is because they will be directed to claim tax credits, for which the two-child limit can only apply regarding a child born on or after 6 April 2017. However, if this occurred on or after 1 February 2019, they would be directed to claim UC (where there is no reference to the date children were born), and the child element would only be payable only for the first two children, unless any exceptions apply.
  • A client's current UC claim includes two children and he is about to have his other three children, all born before 6 April 2017, returned to him from foster care. Currently, he will receive UC for all five children because he is already on UC and they are returning to him during the interim period covered by transitional protection. However, if they were to return on or after 1 February 2019, he would not get UC for all five children.

CPAG challenge

CPAG issued a claim for judicial review in the High Court against the Secretary of State for Work and Pensions to challenge the two-child limit on behalf of two lone parents and a couple. On 20 April 2018 the High Court dismissed CPAG's challenge. However, application to appeal further to the Court of Appeal will be made.

CPAG considers that the two-child limit breaches Articles 8 and 12 of the Human Rights Act 1998 – the right to a private and family life and the right to marry and found a family – in that the policy unlawfully discriminates against a number of different groups including, but not limited to, children with multiple siblings, large families and those with a religious or moral objection to the use of birth control. Further, the principal policy justification for the limit is logically flawed. In its impact assessment, the DWP referred to the two-child limit as ‘ensur[ing] that the benefits system is fair to those who pay for it, as well as those who benefit from it, ensuring those on benefits face the same financial choices around the number of children they can afford as those supporting themselves through work.’1 However, 70 per cent of those claiming tax credits are already working, severely undermining such a fairness objective.

A template letter on CPAG’s website can be used to request a mandatory reconsideration of a decision to limit a family’s benefits to the first two children and, if appropriate, we would suggest that you request the case be stayed pending the outcome of CPAG's further challenge in the Court of Appeal.

Submit cases to the Early Warning System

If you would like to submit case studies to the Early Warning System:



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  • 1. HM Treasury and DWP, Welfare Reform and Work Bill: impact assessment of tax credits and universal credit changes to child element and family element, July 2015