Universal Credit (Removal of Two Child Limit) Bill

The Universal Credit (Removal of Two Child Limit) Bill 2024-26 was introduced on 8 January 2026. It is bill 359 of the 2024-26 parliamentary session and is scheduled for second reading on 3 February 2026.

The bill would remove the ‘two-child limit,’ a policy which restricts the additional support for children in Universal Credit (UC) to the first two children in a household, with certain exceptions. From April 2026 this ‘child element,’ worth around £3,650 a year in 2026/27, would be available for all children in the household.

The government has published a range of accompanying documents alongside the bill, including explanatory notes, an impact assessment, a delegated powers memorandum and a human rights memorandum. These are available on the bill page for the Universal Credit (Removal of Two Child Limit) Bill 2024-26.

What is the two-child limit?

UC awards can include additional amounts for children or ‘qualifying young people’ in a claimant’s household. These amounts are intended to help with the costs of bringing up children, and to reduce child poverty.

Households on UC with a third or subsequent child born from 6 April 2017 onwards do not receive additional amounts for these children. Exceptions are made for some claimants who did not choose to have a third or subsequent child; for example, due to multiple births or non-consensual conception.

The two-child limit does not apply to Child Benefit, which can be paid in respect of any number of children. Although sometimes referred to as the ‘two child benefit cap,’ it is separate from the benefit cap which limits the maximum amount in benefits some working-age households can receive.

Why was the two-child limit introduced?

In the Budget after the 2015 general election the Conservative government introduced the two-child limit on additional amounts for third and subsequent children in Universal Credit and tax credits. The policy aimed to make savings in the welfare system and ensure households on means-tested benefits would “face the same financial choices about having children as those supporting themselves solely through work”.

What impact has it had?

In April 2025 around 483,000 families in the UK were affected by the two-child limit.

The policy would save £2.4 billion in 2026/27, rising to £3.2 billion in 2030/31, were it retained. Polling suggests that more people support retaining the two-child limit than believe it should be removed.

The government estimates (PDF) that in the current financial year (2025/26) 300,000 children are in relative poverty after housing costs as a result of the policy. Analysis suggests that rising child poverty rates have been “more than entirely driven by increased poverty among families with three or more children,” as poverty among smaller families has declined. At the same time, studies suggest the two-child limit has had, at most, a small impact on labour supply, and has not significantly affected fertility rates, trends in abortion rates or school readiness.

Removing the two-child limit from April 2026

The government’s intention to remove the two-child limit in UC from April 2026 was announced in the November 2025 Budget.

In her Budget statement, the Chancellor, Rachael Reeves, argued that the biggest barrier to equal opportunity is child poverty. She pointed to the costs of poverty borne by children and families themselves, local services and society, as well as the welfare system, due to young people whose potential is “suffocated early by limited life chances and missed opportunities”.

The government’s child poverty strategy: Our Children, Our Future: Tackling Child Poverty concluded that removing the two-child limit would be “the most cost-effective way to drive down child poverty rates”. It would be the most impactful part of a strategy which would “see the largest reduction in child poverty by any Government in a single parliament”.

The bill

The bill would remove amendments made by the Welfare Reform and Work Act 2016 to Section 10 of the Welfare Reform Act 2012, and associated secondary legislation, which legislated for the limit.

It would mean that for all new and existing UC awards, the two-child limit would no longer apply from April 2026.

Impact of removing the two-child limit

In the last year forecast by the bill’s impact assessment (2030/31), an estimated (PDF) 570,000 households in Great Britain would gain an average of £450 a month (£5,400 a year) from the removal of the two-child limit.

In 2029/30, around 2 million children would be living in households expected to gain.

The change would result in an estimated 450,000 fewer children in relative poverty after housing costs in 2030/31, a reduction in child poverty rates of more than 3 percentage points compared with a scenario where the two-child limit was not removed. In addition, the government estimates that 150,000 fewer working-age adults would be in relative poverty after housing costs.

Responses to removing the two-child limit

In response to the November 2025 Budget, the Leader of the Opposition, Kemi Badenoch, said the real story was that Labour had “lost control of welfare spending”. She reiterated Conservative support for the two-child limit on the basis that “it means that people on benefits have to make the same decisions about having children as everyone else,” and added that the government were now “buying the votes of their own MPs with taxpayers’ money”.

DUP, Liberal Democrat and SNP spokespersons expressed their respective parties’ support for removal of the two-child limit.

A range of organisations which had been advocating for the limit to be removed, such as the Child Poverty Action Group, Resolution Foundation, and the Joseph Rowntree Foundation, welcomed the government’s decision for the impact it would have on child poverty.

Some commentators did, however, warn that that not all larger families would gain in full from the removal of the limit due to other policies. The government estimates (PDF) that the benefit cap will prevent around 50,000 families gaining from the change, and a further 10,000 will not gain in full as their award would otherwise be above the cap amount. The operation of many local Council Tax Reduction schemes could also increase Council Tax liability for families who gain.

By contrast, the Taxpayer’s Alliance noted the financial cost to be borne by “hard working taxpayers,” and the Institute for Economic Affairs argued the change would reduce “the incentive for parents to seek work or to work longer hours if they are in work”. The Centre for Social Justice shared this concern about work incentives, and argued that the removal of the two-child limit would interact with the wider expansion of health and disability benefit take up “to create benefit incomes that now far outstrip typical earnings”.