Two-child benefit cap to end in Scotland from March 2026

The Herald Scotland

17-06-2025

The mitigation was first announced in 2023, but First Minister John Swinney said ministers needed time to put a system in place.
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The benefit cap was introduced by then Chancellor George Osborne in his 2015 Budget.
The policy, which came into effect in 2017, prevents households claiming child tax credit or universal credit from receiving support for a third or subsequent child born after 6 April that year.
While popular with voters, campaigners have long blamed the limit for a surge in the relative poverty rate for children.
It rose from 27% to 30% between 2010–11 and 2022–23 — an increase of 730,000 — with the rise entirely driven by a surge in relative poverty among families with three or more children.
Labour is under pressure to reverse the policy, with Sir Keir Starmer saying he would be 'looking at all options' to tackle child poverty.
The UK Government has so far resisted calls to scrap the cap, instead announcing a child poverty taskforce to look at tackling the "root causes" of child poverty., which essentially kicked the issue into the long grass.
Shirley-Anne Somerville said the Scottish Government could not wait for the UK Government (Image: Newsquest) Ms Somerville said Scotland could not afford to wait.
'The Scottish Government has consistently called on the UK Government to end the two child cap,' she said.
'Reports suggest they are reviewing the policy's impact, but the evidence is clear. Families — and Scotland — cannot wait any longer for Westminster to make up its mind.
'The Two Child Limit Payment will begin accepting applications in March next year.'
She noted the policy would launch just 15 months after it was announced — the fastest rollout for a social security benefit in Scotland to date.
'This builds upon the considerable action we have taken, including delivering unparalleled financial support through our Scottish Child Payment, investing to clear school meal debt, and continuing to support almost 10,000 children by mitigating the UK Government's benefit cap as fully as possible,' she added.
'However, austerity decisions taken by the UK Government are holding back Scotland's progress. Modelling published in March shows that if the UK Government acted decisively on child poverty, they could help lift an estimated 100,000 children out of poverty this year.'
According to the Scottish Fiscal Commission, the new policy will cost around £150 million in its first year, rising to nearly £200m by the end of the decade.
In March, the Institute for Fiscal Studies warned the policy could unintentionally discourage some low-income families from working more.
While they said the Scottish Government mitigation was a cost-effective way to reduce child poverty, it could worsen 'cliff edges' in the benefits system.
These occur when small increases in earnings result in large losses in benefits, meaning some families could be financially worse off by working extra hours.
Anti-poverty charities have welcomed the Scottish Government decision and repeated calls for Westminster to abolish the cap nationwide.
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John Dickie, Director of the Child Poverty Action Group in Scotland, said: 'It is absolutely right that the Scottish Government acts to effectively scrap the UK Government's two child benefit limit in Scotland.
'Families affected — most of whom are working — are facing real hardship, and the sooner these payments can be made, the better.
'The two child limit is the single biggest driver of child poverty across the UK. The Westminster Government must scrap it at source as a matter of utmost urgency.
'When it does, that will free up resources in Scotland to increase the Scottish Child Payment to the £40 a week that campaigners, including CPAG, have called for — helping make even more progress toward meeting Scotland's child poverty targets.'