Universal credit: 2-child limit

This page was written to help advisers understand how the 2 child limit policy, introduced into Universal Credit from 6 April 2017 works in practice.

NB: We have written this page based on the published legislation. We are still seeking further information from both HMRC and DWP about how this will work in practice and we will be updating this page as more information becomes available

Introduction to the changes

In the 2015 Summer Budget, the Government announced that two changes would be made to Universal Credit from 6 April 2017. Similar changes were announced for Child Tax Credit.

However, the due to delays with the roll-out of UC, interim arrangements have been put in place meaning that the policy will work differently in the interim period than it will once fully in place.  

Impact on who can make a claim for Universal Credit

Prior to 6 April 2017, in full (digital) service UC areas, new claims for WTC and CTC were no longer possible unless the claimant (or their partner in a joint claim) was above state pension credit age.

From 6 April 2017, most families with responsibility for three or more children will need to claim tax credits instead of Universal Credit even in full (digital) service UC areas.

However for those families, if either of two exceptions apply, a claim for UC must be made, not tax credits. The exceptions are:

For this purpose ‘reclaim’ means a claim that is made by a single person or members of a couple jointly and the claimant (or either joint claimant) meets the following conditions:

  1. The claimant was previously entitled to an award of universal credit the last day of which fell within the 6 months preceding the date on which the claim is made; and
     
  2. During that 6 months:
     
    • The claimant has continued to meet the basic conditions required for universal credit (disregarding the requirement to have accepted a claimant commitment and any temporary period of absence from Great Britain that would have been disregarded during a period of entitlement to universal credit); and
    • The claimant was not excluded from entitlement to universal credit due to restrictions (for example due to being a member of a religious order who is fully maintained by their order, is a prisoner or serving a sentence of imprisonment detained in hospital unless certain exceptions apply).

These interim rules will be in place between 6 April 2017 and 31 October 2018 – although the Secretary of State has the power to extend the interim period to protect the efficient administration of UC. From 1 November 2018, it is expected that claimants with responsibility for three or more children will claim UC instead of tax credits.

Other elements of Universal Credit

The disabled child and severely disabled child elements remain payable for as many children or qualifying young people on the claim who meet the qualifying conditions.

Similarly, the two child limit does not apply to the childcare element, so even if a child element is not payable for a child the claimant can still claim help with childcare costs for that child (as long as the other conditions for the childcare element are met). 

Even if the child element is not payable for a specific child, it is important that the claimant(s) report the addition of the child to their household to DWP/HMRC. This is because they may still be entitled to the disability elements or childcare element. It will also mean that if one of the other children move off the claim, the child may move into a position where the child element is payable. If they are already on the system, this should happen automatically.

The 2 child limit until 31 October 2018

Prior to 6 April 2017, the child element of UC was paid for each child or young person included in the claim.

From 6 April 2017 claimants will receive a child element for the first and second child or qualifying young person in their household. However, they will no longer receive the child element for a third or subsequent child born unless:

The practical effect of transitional protection is that all children or qualifying young people born before 6 April 2017 will receive a child element.

See the section below ‘ordering of children’ which explains how to order children and qualifying young people in order to establish who is the first, second, third or subsequent children on the claim.

The 2 child limit from 1 November 2018

From 1 November 2018, new claimants will only receive child elements for the first and second children. Third and subsequent children will not receive a child element unless an exception applies – no matter their date of birth (and even if they were born before 6 April 2017).

Some transitional protection will apply for people who have claimed UC, CTC or some other benefits with child elements in the preceding 6 months.

Existing UC claimants

Existing UC claimants will continue to receive child elements for any child or young person who they are responsible for and who was born before 6 April 2017.

For children born after 6 April 2017, if they are the first or second child on the claim, then a child element will be paid for them. However if they are the third or subsequent child, they will only receive a child element if an exception applies.

Ordering of children

The legislation that introduced the 2 child limit policy contains specific rules on how to order children.

When working out the order of children on the claim, all children are taken into account – including those born before 6 April 2017.

The order is based on date, with the earliest date first. The date to be used depends on the child:

Where:

- then DWP can order the children in whatever way is appropriate to ensure that the individual child element is included in respect of the greatest number of children.

A step-parent means a person who is not the child’s parent but who is:

If immediately prior to ceasing to be a member of that couple of that polygamous unit the person was, and has since remained, responsible for the child.

Re-ordering can occur when a new child joins the household. However it can also happen when a child leaves the household. When that happens, the ordering above should be looked at again.

Transitional protection

From 6 April 2017 claimants will receive a child element for the first and second child or qualifying young person in their household. However, they will no longer receive the child element for a third or subsequent child unless:

For assessment periods in which the interim period begins (it begins 6 April 2017 and is due to end 31 October 2018) or that falls wholly within the interim period:

They will receive a child element even if they are the third or subsequent child on the claim if the child/qualifying young person was born before 6 April 2017 and there are at least two other children or qualifying young people on the claim who were born before 6 April 2017 and who are the first and second children under the ordering rules.

The practical effect of this provision is that all children born before 6 April 2017 receive a child element.

For assessment periods in which the interim period ends or that begin after the end of the interim period:

There will be transitional protection if:

Two awards are connected if the later award was made:

The purpose of these provisions is to ensure that people with existing UC claims at the point the interim period ends and those who move across from CTC (either due to a change of circumstances or due to managed migration) do not lose child elements already established for children that they remain responsible for.

Exceptions

Multiple births

The purpose of the multiple birth exception is to recognise that families do not normally plan for a multiple birth.

In some cases, a multiple birth will not need an exception. For example, if a claimant has twins and claims UC for the first time – the twins will each receive a child element because the claimant is not receiving a child element for any other child.

The multiple birth exception will be needed where:

The first child in a multiple birth will only get the child element if they are the first or second child on that claim. If they are not, then they will not receive the child element. For all other children in the multiple birth (other than the first born), they will each receive a child element due to the multiple birth exception as long as the claimant remains responsible for at least two children born as part of the multiple birth.

Multiple birth example 1

Chester and Roseanne are claiming universal credit. They have no children. In May 2017, Roseanne gives birth to twins. As the couple are not claiming for any other children, no exception is required and the child element will be paid for each child.

Multiple birth example 2

Assume that Chester and Roseanne from Example 1 had Triplets in May 2017 (rather than twins). The first and second child would receive child elements, however under the new rules the third child would not receive a child element.  

The multiple birth exception means that in this case – a child element would be payable for Child 3.

Multiple birth example 3

Elliott and Justine are existing UC claimants who have two children who were born before 6 April 2017. In May 2017, Justine gives birth to twins – Dexter and Diane. Under the normal rules, no child elements would be paid for either Dexter or Diane, because they are the third and fourth children on the claim. 

As Dexter (the third child on the claim) is the first child in the multiple birth and isn’t the first or second child on the claim – no child element will be paid for him as no exception applies.

However, a child element will be paid for Diane because she is the second child in the multiple birth and the multiple birth exception applies.

Adoption

The adoption exception will apply to a child if they have been:

The exception will not apply if:

Adoption example 1

May is a single parent. She claims UC for her two children who were born in 2010 and 2012 respectively. In May 2017, she adopts a baby. Under the normal rules, she would not receive a child element in respect of her new baby because she is already claiming for two other children. However, she can claim an adoption exception meaning she will receive the child element for all three children.

If May was to give birth to a fourth child in July 2018, she would not receive the child element for that child unless one of the other exceptions applied.

Non parental caring arrangements

This exception will apply where the claimant(s) is a friend or family carer of the child. A ‘friend or family carer’ means a person who is responsible for the child and any of the following apply:

The exception will also apply where the claimant is responsible for the child and any of the first 6 bullets above applied immediately prior to the child’s 16th birthday and since that date the claimant has continued to be responsible for the child.

The exception will NOT apply if the claimant(s) is the parent of the child or step-parent of the child.

Child of a child that the claimant is responsible for

This exception is intended to cover situations where the claimant’s child has a child of their own who the claimant is also responsible for. This situation is most likely to happen where the claimant(s) is the grandparent of the child.

Note that for UC purposes a child is defined as someone under the age of 16. This exception only applies where the claimant is responsible for a child (under the age of 16) who has a child of their own. For child tax credit, the exception applies where the claimant is responsible for a child or qualifying young person, who has a child of their own.

If the claimant receives an exception for the child’s child in this situation and then goes on to have another child of their own, they will not receive a child element for their own new child unless one of the other exceptions applies.

Non consensual conception

This exception applies in relation to a child where:

The legislation goes on to further define ‘did not have the freedom or capacity to agree by choice’ as including (but not limited to) circumstances which at or around the time the child was conceived:

Personally connected in this context means that B is in an intimate personal relationship with the claimant or B and the claimant live together and are members of the same family or have previously been in an intimate personal relationship with each other.

The claimant and B are members of the same family if, at or around the time the child in question is conceived:

The behaviour has a serious effect on a claimant if it causes the claimant to fear, on at least two occasions, that violence will be used against them or it causes the claimant serious alarm or distress which has a substantial adverse effect on their day to day activities.

Claiming exceptions

Process

Universal credit claimants who are part of the live service will need to phone DWP to add an additional child to the claim and we understand that if it is the third or subsequent child being added to claim they will be informed they will not receive a child element unless an exception applies and will be asked whether they think an exception applies. They will then be asked to send the relevant evidence for that exception (see below).

Universal credit claimants who are part of the full (digital) service will be asked on the online system if they think an exception applies when they add a third or subsequent child. They should then receive a call from a DWP adviser who will signpost them to the relevant forms online (we are investigating what options exist for those who do not have internet access). An appointment will then be arranged with a work coach where supporting evidence (see below) can be provided.

It should be noted that the exception will only be applied from the beginning of the assessment period in which it is claimed. So if a claimant phones DWP to add a child to the claim but does not claim an exception at the same time, DWP’s will not backdate the exception to the date the child was added if the claimant later contacts them to say an exception should apply.

Evidence requirements

DWP will require evidence that the child meets the exception conditions in most cases except for multiple births (which can be established from information already given).

If the claimant has previously provided evidence to HMRC for this exception, DWP can accept that the evidence has been provided for UC purposes.

Continuation of exceptions for step-parents

The regulations allow for the continuation of exceptions in cases involving step-parents. DWP say that this is to avoid a cash loss where a step-parent takes responsibility for the children after a joint claim with their parent ends. The continuation continues until the step-parent is no longer responsible for the relevant child. If the step-parent forms a new relationship, the exception would continue if they remain responsible for the child.

The regulations have introduced a specific definition of step-parent. It means a person who is not the child’s parent but who is:

* If immediately prior to ceasing to be a member of that couple of that polygamous unit the person was, and has since remained, responsible for the child.

There will be a continuation of an exception for a child if no other exception applies to that child, the claimant(s) is the child’s step-parent and the claimant has previously been entitled to an award of universal credit as a member of a couple jointly with a parent of the Child where an exception for multiple birth, adoption, or non-consensual conception applied.

The run-on will continue until either the step-parent is no longer responsible for the relevant child or until there is break in their Universal Credit entitlement over 6 months. The continuation also applies where the previous claim was CTC, old style JSA or income support.

The first child premium

Prior to 6 April 2017, a higher amount of child element was included for the first child on a UC claim – called the first child premium. This higher rate will no longer be paid for a first child born after 6 April 2017. Only claimants who are responsible for a child or qualifying young person born before 6 April 2017 will receive the first child premium.

Updated 6 April 2017