Two child benefit limit impacting over 65,000 children in Wales

A Freedom of Information request has revealed that more than one in ten children living in Wales are affected by the two-child limit to benefits.

The data, obtained by the End Child Poverty Coalition, has revealed just how significant the impact of the two-child limit on benefits is in Wales, with more than 65,000 children in Wales are affected by the two-child limit – 11% of all children.

The limit affects families entitled to benefits who have had a third or subsequent child after 6 April 2017. These parents are denied £3,235 per year per child compared with families who have a third or subsequent child born before that date.

‘Unfair policy’

Reacting to the data, Dr Steffan Evans, Head of Policy (Poverty) at the Bevan Foundation said: “The two-child limit on benefits is an unfair policy. People would rightly be outraged if schools or hospitals turned away children because they have two older siblings, yet this is what the two-child limit to benefits does. To see that so many children in Wales are affected by this policy is highly concerning.”

The policy affects children all over Wales. More than one in ten children are affected by the limit in every Welsh local authority bar three (Monmouthshire, the Vale of Glamorgan and Powys).

Denbighshire is the local authority where the highest proportion of children are affected by the limit with one in seven children in the local authority affected. Cardiff meanwhile is the local authority where the highest actual number of children are impacted, with 9,250 families affected by the two-child limit.

Dr Evans added: “The two-child limit is having an impact on families in all of our communities. Across Wales there will be families dreading Christmas, worrying about how they are going to heat their home and feed their children rather than looking forward to what should be a magical time of year.”

The revelation of new data follows on from the publication of a report earlier this year that highlighted that children from larger families are significantly more likely to live in poverty. In 2021/22, the UK poverty rate among children with two or more siblings was 42 per cent, compared with 23 per cent and 22 per cent among children in families with one or two children. Research suggests that scrapping the two-child limit is one of the most cost-effective ways of addressing child poverty.

Action needed

With so many children living in poverty, the need to take action has never been greater according to Dr Evans, who said: “At a UK level the End Child Poverty Coalition is calling for the limit to be scrapped, given the clear link between the policy and child poverty rates in larger families.”

“In Wales, the Wales Expert Group on the Cost of Living Crisis called on the Welsh Government to establish an emergency payment to all households with children with extra for large households to help families through the coming months. The new data shows why the creation of such a payment is more important than ever.”

Welsh Ministers support the Joseph Rowntree Foundation’s call for the UK Government to reform Universal Credit to implement an “essentials guarantee” whereby the Universal Credit standard allowance is set based on the cost of essentials (such as food, utilities and vital household goods) for the adults in a household and this is reviewed annually.

A Welsh Government spokesperson said: “As Welsh households face the extremely difficult challenges brought by the cost of living crisis, we believe it is vital that the UK Government takes steps to protect household incomes and ensure that people are able to meet their essential household costs.”

“We are addressing child poverty as an absolute priority and we are working with our partners towards a Wales where every child, young person and family can prosper.”

“During 2022-23 and 2023-24 this support is worth more than £3.3bn and this year includes £38.5m towards the Discretionary Assistance Fund (DAF).”

“However, significantly reducing child poverty in Wales will require the UK Government to show an equal level of commitment and to play a far greater part in addressing structural inequalities than it has done since 2010.”