Work & Pensions Secretary Amber Rudd has kept her promise to review the highly controversial Universal Credit by doing a U-turn on a plan to extend the two child benefits cap.
The decision removes the threat for around 15,000 families of having their benefits cut if they have more than two children.
The change was due to be made later this month, affecting the child element of the controversial new system which has been designed to combine six existing benefits into one, but Ms Rudd has vetoed the idea saying it would not be ‘right’.
When the policy was first drafted it was seen as a means of encouraging family planning by restricting the benefits available to families with more than two children and would apply to children born after April 2017.
But then the decision was taken to widen the measure to take in families whose children had been born even before the rule was drafted, forcing a potential cut in payments for around 15,000 families.
That cut will no longer happen, but the limit will stay for new claimants.
Ms Rudd said: “It’s right that we have a two-child policy when people are thinking about having a third child. People on low income and benefits need to consider what sort of funds they’ve got.
“But I don’t think it’s right that you have this existing two-child policy that was introduced recently acting retrospectively for people who might have three, four, or five children.
“It’s with the fairness of Universal Credit in mind that I decided to scrap it.”
Fantastically good news
The decision was hailed as ‘fantastically good news’ by the Child Poverty Action Group, but the charity is to continue its campaign to have the limit scrapped altogether.
Spokeswoman Josephine Tucker said: “We hope that this announcement will be the first step towards abolishing the policy as a whole.
“As time goes on more and more families will still be caught up in it and hundreds of thousands of children will still lose out on support simply because of the numbers of brothers and sisters they have.
“Not only is that not right in principle, but it’s going to cause a serious increase in child poverty.”
In another major announcement regarding the benefit Ms Rudd said she had decided to pause its roll-out to another three million claimants and will run a 10,000 pilot scheme instead.
She said: “I’m making a number of changes to our welfare system to make sure that it delivers on the intent which is to be a safety net and also to be a compassionate and fair system helping people into work.”