Rudd does u-turn on Universal Credit

Amber Rudd does a u-turn on extending the two-child benefits cap and allows more frequent payments.

Woman with empty wallet


The Secretary of State for Work and Pensions has announced that she will scrap plans to extend a child benefits cap to around 15,000 parents who have more than two children among other changes to Universal Credit.

The benefits cap was brought in for new Universal Credit claimants in April 2017 except in special circumstances such as multiple births, but was due to be extended from 1st February to parents who had made claims before that date. This would have meant families with three or more children making a new claim for benefit would be directed to claim UC rather than tax credits.

Amber Rudd said she would not extend the cap. She recently said she will delay the transfer of people already receiving benefits before Universal Credit was brought in onto the controversial new scheme and would instead run a pilot involving 10,000 people.

She also opened the way to more frequent payments, said an online system would be built so rent could be paid direct to landlords and suggested the benefits freeze, in place since 2015, would end in 2020. In addition, she said Universal Credit payments will go directly to a household’s main carer.

The changes were welcomed by charities such as the Child Poverty Action Group, which has been campaigning on issues relating to benefits cuts and Universal Credit, such as the two-child cap.

It has highlighted a range of people affected by the cap. They include:

  • 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.

The CPAG made 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 the case, but it is being appealed.

The CPAG says 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 – because “it 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”.

It also claims that the justification for it – that it is fair and ensures “those on benefits face the same financial choices around the number of children they can afford as those supporting themselves through work” – is flawed because 70 per cent of those claiming tax credits are in work.

Tony Wilson, director of the Institute for Employment Studies (IES), welcomed the moves on UC, but said the Government needed to go further: “Today’s reset on universal credit is welcome news. Universal credit remains a good idea in principle but in practice it is not working as it should.

“Half of universal credit claimants are in debt or housing arrears and just one third find it easier to claim than the benefits that it has replaced. Giving claimants the option of being paid fortnightly instead of monthly, as happens in Scotland, will be a big improvement.

“The changes to the two-child limit are also welcome, but the Spending Review needs to go further than this and look more fundamentally at the adequacy of the system, particularly for low-income families.”

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