It has now been seven years since the introduction of two-child limit, or Sibling Tax. This policy is one of the main drivers of rising child poverty in the country, and removing it would be an immediate and the most cost-effective way for the UK Government to dramatically reduce child poverty. This is why Save the Children, alongside impacted families and over 100 organisations who form the End Child Poverty Coalition, are urging both the Government and the Labour Party to commit to abolishing it.
What is the two-child limit?
The two-child limit means that parents only receive support for up to two children through Universal Credit. This means that a child with two or more siblings would get less financial support than children that only have one brother or sister.
While having another sibling to love and play with can be a big joy in a child's life, the lack of support for these families means budgets are stretched too thin. At Save the Children UK, we call the policy the Sibling Tax as children are penalised for having more than one sibling.
Today, 1 in 10 children are impacted by the two-child limit. In reality this means children are going without essentials, like nutritious food or a warm-enough home, and they don’t get to enjoy the same enriching experiences as other children. Parents have told us of children going to school in uniform that doesn’t fit, missing out on after school clubs, and not being able to have friends to the house, as there isn’t enough food to feed an extra mouth.
Campaigner Thea delivered a powerful speech to party leaders at the seven year anniversary stunt outside the Department for Work and Pensions. Thea is impacted by the two-child limit and spoke about how having her much loved, but unplanned, third child has impacted her family finances:
“I am judged on my Universal Credit statement for having chosen to continue my third pregnancy. And all three of my children are being financially penalised for the rest of their childhoods, because there are three of them. Why are my kids being punished for the choice I made?”
Why was it introduced?
The policy was introduced by the UK Government in 2017 as part of their austerity project to reduce government budgets. However, in 2019, the cross-party Work and Pensions Committee in Parliament found the policy “not only fails to achieve the Government’s own objectives but has evident, unintended consequences that no Government should be willing to accept.”
Just two years after the policy was introduced, the impact on child poverty was obvious. The situation for impacted children has only got worse since then.
Not only is it wrong to make children pay just because they have a larger family, the two-child limit applies to parents who are already working (59% of impacted parents are in work), and to those who may have a disability, health issues or full-time caring responsibilities. The policy can also act as a barrier to work because family budgets are too tight to cover the necessary childcare and travel costs associated with taking on a new job.
As Penny, mother of three, whose family is impacted by the two-child limit said:
“Life’s unpredictable, you know. Like I've worked and I've only stopped working because my MS has got bad. But I didn't plan on it. And I didn't plan on having MS. And I didn't plan on having to be on Universal Credit or anything like that. I've worked since I was 15.”
Support provided by governments across the UK through public services like NHS or the education system does not change because of the number of children in that family. But for children growing up in poverty, the unfair two-child limit means not getting the financial support they need through the social security system with disastrous effects for those children, families, and our wider society.
The most cost-effective way to reduce child poverty
4.3 million children now live in poverty in the UK – 100,000 more than last year. This is robbing children of their childhoods and costing the Exchequer around £39 billion a year. Scrapping the two-child limit is the most cost-effective way to reduce child poverty – and would lift 300,000 children out of poverty. It is estimated that it would cost around £1.8 billion for 2023/24 – less than 1% of the welfare bill.
As Thea closed her speech by saying,
“The Universal Credit child element for [my third child] Baby Isaac would at least lift my kids out of poverty so they can focus on learning, playing and being kids. Baby Isaac will not be exempt from income taxes and NI contributions when he grows up. He will be paying for our state pensions and NHS services when we’re retired. So why is he exempt from receiving state benefits now? Why do my kids deserve less than other kids just because there are three of them?”
Both the UK Government and the Labour Party must commit to scrapping this damaging policy as part of a wider drive to reduce child poverty in the UK.
