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Huge change to two-child benefit cap rules revealed by Scottish government – and it will impact thousands of families
Keep scrolling to learn the exact date the move will come into effect
THOUSANDS of families in Scotland are set for a boost following an announcement from government that it will axe the two-child benefit cap.
The cap limits the amount of financial support families can receive to just two kids.
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It means that parents can't claim the child elements of Universal Credit or tax credits worth up to £3,455 per year for third or subsequent children born after April 2017.
But now the Scottish government has announced plans to mitigate the cap to help families and children facing poverty.
Finance Secretary Shona Robison made the announcement in her Holyrood Budget speech this afternoon
Speaking today, she said: "We will mitigate the two-child cap."
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The plans will not come into place until 2026, and only be available to residents in , not in the rest of the UK.
She added: "We will work as hard as possible in 2025 so we can start paying families in 2026. The cap will be scrapped."
Before the general election, Sir Keir Starmer said his government would not be able to afford to scrap the cap.
Figures from policy groups also said that getting rid of the limit would cost the UK £3.4billion a year.
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A source said: "This is the big rabbit out of the hat. It's designed to stick it right to Labour."
The UK-wide cost of lifting the cap is reported to be around £3.4billion, meaning the cost for could be more than £250million, based on population share.
Shifting from Legacy Benefits to Universal Credit
Alison Garnham chief executive of Child Poverty Action Group said the Scottish government made the right decision but Westminster must now step up.
She said: "There can be no justification now for Westminster dragging its feet and continuing to roll out poverty to more and more children through this policy from the austerity era."
"If the PM wants families to feel improvements in their living standards, the policy must be scrapped when the government’s child poverty taskforce reports in Spring."
ALL CHANGE FOR SCOTLAND
It comes just one week after the Scottish government revealed plans to give every pensioner access to the Winter Fuel Payment of £300 next year.
It follows a decision by the UK Chancellor Rachel Reeves to means-test the fund which hands £300 to the elderly to help with heating costs.
It means that only those claiming benefits such as Pension Credit will receive the money this winter.
But now in Scotland next year, every pensioner will receive between £100 and £300 cash.
From 2025, those in receipt of qualifying benefits would get £200 or £300 depending on their age, while all other pensioners would get £100.
WHAT IF I DON'T LIVE IN SCOTLAND
The UK government has additional support measures for parents to help with childcare costs.
This includes free childcare for your child aged nine months to four years old if you live in England.
The number of hours working parents can claim depends on the age of their child.
From September 2025, children aged nine months to two years old will qualify for 30 hours per week of free childcare
To qualify, you'll need to earn at least the equivalent of the national minimum wage for 16 hours a week.
Both parents will need to earn the equivalent of at least £166 per week, each with a taxable income of no more than £100,000.
Your two-year-old can also get free childcare if you live in England and get any of the following benefits:
- Income support
- Income-based jobseeker's allowance (JSA)
- Income-related employment and support allowance (ESA)
- Universal Credit and your household income is £15,400 a year or less after tax, not including benefit payments
- The guaranteed element of pension credit
- Child tax credit, working tax credit (or both), and your household income is £16,190 a year or less before tax
Parents on Universal Credit and in a paid job can also have up to 85% of their childcare costs covered, up to £1,014.63 a month for one child and £1,739.37 a month for two or more children.
It doesn't matter how many hours you work.
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If you live with a partner, you both need to work to qualify.
You usually have to pay for the childcare and claim back the costs, but if you go back to work or increase your hours you can request for the money to be paid upfront.
Are you missing out on benefits?
YOU can use a benefits calculator to help check that you are not missing out on money you are entitled to
Charity works out what you could get.
Entitledto's determines whether you qualify for various benefits, tax credit and Universal Credit.
MoneySavingExpert.com and charity StepChange both have benefits tools powered by Entitledto's data.
You can use to determine which benefits you could receive and how much cash you'll have left over each month after paying for housing costs.
Your exact entitlement will only be clear when you make a claim, but calculators can indicate what you might be eligible for.
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