The Resolution Foundation think tank has revealed that almost 500,000 households are now subject to the cap on some benefits introduced in 2017. Known as the two-child cap, the legislation restricts universal credit and child tax credit payments to the first two children in family homes, resulting in a loss of around £3,200 per extra child per year. More than 100,000 families are affected by the unconnected benefit cap. Changes have resulted in two-child families remaining at risk of poverty at a rate of one in four, while over 50% of families with three or more children are expected to be living in poverty by 2028-39.
Families impacted by the two-child cap are still entitled to claim child benefits, help with disabled children and help with childcare, subject to meeting eligibility criteria. The government has highlighted that it raised benefits by 6.7% last April alone, aligning them with inflation and that there are now 1.7 million fewer people living in absolute poverty than in 2010, including 400,000 less children. The Resolution Foundation has recommended that the policy be scrapped, noting that this would increase government spending by £3.6bn, and the poverty of 490,000 children would be eradicated by 2035.
The Resolution Foundation report states that larger families are particularly affected by the policy and are more likely to necessitate access to food banks. Six out of ten families partially restricted by the two-child cap remain in work while the majority of families on Universal Credit funds are also employed. Many are struggling due to circumstances over which they have no control, including job loss, the death of a partner, and family breakdown.
Single parents have been disproportionately affected by the policy, with almost half of those impacted in 2021 being individual heads of households. Discrimination against low-income families is criticized and labels low-income families by numbers rather than people. It is stressed by Barnardo’s, which provides support to Margate-based single mother Frances on a day-to-day basis, that social and economic policies keep families in prolonged states of crisis
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