Two Child Limit for Housing Benefit, Child Tax Credit and Universal Credit

The government has introduced a two child limit into Housing Benefit, Child Tax Credit and Universal Credit. This does not affect entitlement to Child Benefit.

Generally, if you already have 2 or more dependent children in your family and you have a new baby who was born on or after 6 April 2017, (or you become responsible for a child on or after 6 April 2017 and this means you are now responsible for 3 or more children and one was born on or after 6th April 2017) your Child Tax Credit or Universal Credit will only increase if that child is disabled and you get Disability Living Allowance for them and/or you have to pay for registered childcare for them, or if an ‘exception’ applies.

The Housing Benefit rules have changed in the same way. But note that if you get Income Support, Income-Based Jobseeker’s Allowance or Income-Related Employment and Support Allowance (or Universal Credit and you are claiming Housing Benefit because you are living in 'specified' or ‘temporary’ accommodation) you will already be getting your maximum Housing Benefit entitlement – so this change will not affect your current Housing Benefit award.

Example: Gerry and Sonia claim Working Tax Credit, Child Tax Credit and Housing Benefit to top up Gerry’s wages. They have 4 children aged between 10 and 3. They have a new baby, born in May 2017. The baby has no health conditions or disabilities and Sonia does not work, so they do not pay for any childcare. They will not get any extra Child Tax Credit for the new baby nor any extra Housing Benefit. But they can get extra Child Benefit.

There are some exceptions to the rules.For children who would otherwise be likely to be in local authority care, ie. living with a family under adoption, non-parental caring arrangements, exceptions will be applied. In certain circumstances relating to multiple births and where a child was conceived as a result of non-consensual sex, extra money for a 3rd, 4th, 5th etc child could be included.

So, for example, if you have no dependent children but then give birth to triplets on or after 6 April 2017, or if you already have one dependent child, then you give birth to twins on or after 6 April 2017, you will receive extra Child Tax Credit, Housing Benefit for all those children. If you are an existing Universal Credit claimant, you will receive extra Universal Credit.

If you think an exception should apply, it will be up to the Tax Credit Office or Universal Credit Department to decide whether extra benefit can be paid for a 3rd, 4th, 5th etc child.

The Housing Benefit Office must follow the decision of the Tax Credit Office and, until the Housing Benefit Office have seen the Tax Credit award letter, they cannot include any extra child allowance for a 3rd, 4th, 5th etc child. This is because the information they receive by computer from the Tax Credit Office shows the total amount of Tax Credits being paid, but not which children are included in the award.

If you are concerned about the Two Child limit, please contact the Financial Inclusion Team on 0300 111 000 or 0800 633 5500 for advice.