DWP benefits cap to hit hundreds of thousands families losing £4,300

A couple check their finances
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Families across the UK are bracing for the impact of a DWP benefits cap that has been labelled "cruel" by activists.

The Institute for Fiscal Studies (IFS) has released figures indicating that the number of children affected by the two-child limit on Child Tax Credit and Universal Credit is expected to surge by a third. Currently, around two million children are impacted, but this figure is predicted to rise by 250,000 in the next year, with an increase totalling 670,000 by the end of the next Parliament, reports the Express.

Households claiming these benefits could face an annual loss of £4,300 due to the cap, which equates to a 10 percent reduction in their income. Eduin Latimer, IFS research economist, remarked: "The two-child limit is one of the most significant welfare cuts since 2010 and, unlike many of those cuts, it becomes more important each year as it is rolled out to more families."

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The study suggests that abolishing the cap would result in a £4.3 billion yearly expense for the Government. Mubin Haq, CEO of the abrdn Financial Fairness Trust, stated: "The limit has been a significant contributor to child poverty amongst large families during a period when poverty for families with one or two children fell."

He added, "If the next Government is serious about tackling child poverty, it will need to review the two-child limit." So far, neither Labour nor the Conservatives have committed to scrapping the benefits cap in their manifestos. Haq also highlighted the particular injustice of the policy affecting only children born after April 5, 2017.

Most of the families hit hardest by the two-child limit are either working or have caring duties for disabled relatives or young children.

Paul Carberry, Action for Children's chief executive, said: "Here is yet more shocking evidence of the huge scale of the damage being caused to children and families by the cruel two-child limit, which is well known to push families into poverty and, which if scrapped, would lift 300,000 children out of hardship."

"The election presents an opportunity for bold and ambitious action to be taken and for all political parties to commit to ending child poverty once and for all. That must include an increase to the child element of Universal Credit and scrapping the two-child limit and benefit cap."