New analysis from the Joseph Rowntree Foundation (JRF) demonstrates the urgency of scrapping the two-child limit, alongside a key reform to Universal Credit.
A “protected minimum floor” would introduce a safety net into Universal Credit below which no one should fall, by limiting reductions made from debt deductions or the benefit cap.
Families with children are currently projected to endure the worst decline in living standards of all family types during this parliament, but this combination of policies would offset or even reverse the projected decline in average living standards for many.
Without action, couples with children will see their disposable income fall by £750 on average by the end of this parliament, while lone parents will see a drop of £780, following falls in average incomes for both groups over the last Parliament.
For couples with children the two policies together would reduce the average decline in living standards by a third (32%), meaning the reduction in disposable income falls to £510. For lone parents the impact is far more striking, with disposable income growing by £320 (1.2%).
By the end of the parliament, an estimated 2.1 million children would be benefitting from these policies. The approach would also lift half a million children out of poverty and reduce poverty for another million by the end of this parliament.
Katie Schmuecker, Principal Policy Adviser at JRF, said:
“Children growing up in poverty is neither acceptable nor inevitable. The government can lift the two-child limit and improve the safety net within Universal Credit and doing so would make a substantial difference to both the child poverty numbers and the living standards of families around the UK.
“With 4.5 million children in the UK living in poverty, action on the two-child limit is long overdue. As Labour marked a year in power, nearly 9 in 10 low-income families with three or more children were going without the essentials they need such as food, heating and toiletries.
“These steps have been shown to be effective, and should form a crucial part of the child poverty strategy, due to be published this autumn, enabling it to deliver ambitious progress on child poverty overall.
“The government is right to highlight the need to reduce child poverty and to raise living standards. This analysis shows an achievable route to delivering on both those goals this autumn.”
The analysis from JRF also found:
- There are already 141,000 children in families impacted by the two-child limit who are also currently benefit capped, and this number will rise if the two-child limit is removed. Children in these families will not benefit from the removal of the two-child limit unless the benefit cap is also addressed.
- Removing the two-child limit would lift 300,000 children out of poverty by the end of this parliament. Coupled with the introduction of a protected minimum floor, 500,000 children would be lifted from poverty.
For mor information please visit: https://www.jrf.org.uk
