Good morning,

Following the Chancellor’s announcement about the abolition of the 2-child element benefit cap, I have been asked when this is likely to be introduced and what impact it’s expected to have on families with more than two dependent children, currently affected by the cap.

The change is scheduled to take effect in April 2026. Until then, the two-child limit rules still apply to children born after April 2017.

Most of the families currently affected by the cap could see their Universal Credit increase by an average of around £3,500 per year for each additional child. For example, a family with four children, where the third and fourth child were born after April 6, 2017, is currently affected, and could receive two extra child element awards, currently paid at £292 pcm per child.

However, families with multiple children (e.g. 4 or 5) and those living in high-rental areas might also have their extra “child element” entitlement effectively reduced by the “Overall Benefits Cap” (OBC), a separate cap applied to the overall UC award. Whereas those families already affected by the OBC will gain nothing from the additional child elements.

Another complication concerns families currently receiving “Transitional Payments” as part of their Universal Credit award, after being migrated to UC from ESA, JSA, Income Support, etc. In these cases, the addition of new child elements will “erode” or, in a few cases, extinguish this transitional element, meaning their overall UC payment will not increase as much as would otherwise be expected.

It’s also important to remember that Universal Credit is a means-tested benefit. When claimant families have earnings, alterations to the level of earnings can make a significant impact on the level of their overall award.

If you require any further information on this or any other Universal Credit or Housing benefit, please email bill@ucadvice.co.uk or phone 07733 080 389.

Reagrds

Bill Irvine

UC Advice & Advocacy Ltd

@Billirvine17