DWP scrapping controversial rule would 'pull 540,000 kids out of poverty'

DWP faces fresh pressure to scrap the controversial two-child benefit cap, amid fears it is leaving kids in poverty up and down the country.

A Department for Work and Pensions rule change could lift THOUSANDS of kids out of poverty. The DWP faces fresh pressure to scrap the controversial two-child benefit cap, amid fears it is leaving kids in poverty up and down the country.

In its report the Institute for Fiscal Studies says reversing the two-child benefit limit would pull 540,000 kids out of absolute poverty - and cost £2.5billion a year. The think-tank says the rise in child poverty has been "entirely driven" by higher rates of poverty among families with three or more children.

The benefit cap places an upper limit on the total benefits that working-age households can receive. The amount varies by location and household but particularly hits those living in areas with high rents. The DWP figures show that households affected by both the two-child limit and the benefit cap lose £273 a month on average due to the benefit cap – equivalent to about £3,276 a year. There are 4,120 households that lose out on more than £500 a month – £6,000 a year.

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Anna Henry, research economist at the IFS, said: "‘The recent rise in measured child poverty is entirely driven by higher rates of poverty among families with three or more children. Scrapping the two-child limit would be a cost-effective way of reducing child poverty, at a lower cost per child lifted out of poverty than all the other obvious changes to the benefits system, but it is not a silver bullet."

She added: "It would do nothing for households affected by the household benefit cap, who are among the poorest. In fact, removing the two-child limit would lead to 70,000 more households being affected by the household benefit cap, wiping out some or all of its effect for those households."

A Government spokeswoman said: “No child should be in poverty – that’s why our new cross-government taskforce is developing an ambitious strategy to reduce child poverty and give children the best start in life. Alongside this, we have extended the Household Support Fund to support the most vulnerable with essentials this winter and committed to reviewing Universal Credit while we deliver on our plan to tackle inequality and make work pay.”