This is the harsh reality of the two-child benefit cap for families: 'It's like wearing a scarlet letter'

Thea is stressed when I call her for the first time. She is in a cafe trying to find a treat for her son, the eldest of her three children, but she is struggling to find something he wants to eat and she can afford.

“As a parent, you hold nothing back to protect your kids and to make them feel loved and safe,” the 38-year-old says when she returns my call. “I’m really stretching myself to make sure my kids don’t feel like they have less than the kids they go to school with.”

Thea’s children are among more than 1.6 million impacted by the two-child limit on benefits, which stunts the income of families claiming universal credit or tax credits who have three or more children.

Are you impacted by the two-child limit on benefits? We want to tell your story. Get in touch with senior reporter Isabella McRae on isabella.mcrae@bigissue.com or share your story here.

Charities have called it “one of the cruellest welfare policies of the last decade”, with low-income families losing £3,455 a year for a third or subsequent child born after April 2017.

Recent figures from the Resolution Foundation suggest as many as 490,000 children could be pulled out of poverty if the government scrapped the two-child benefit cap.

Two-child benefit cap is a ‘sibling penalty’

Lynn Perry, the chief executive of Barnardo’s, tells Big Issue: “It almost acts like a sibling penalty. There’s no other area of policy where we wouldn’t provide for the third or subsequent child. We wouldn’t see that in education or health services, or any other area of policy that affects children. It creates real pressures within families.”

The Labour government has pledged to reduce child poverty and established a taskforce committed to that mission.

A DWP spokesperson said: “No child should be in poverty – and we are committed to ensuring that children across the country have the best start in life.

“That’s why our new ministerial taskforce will begin the urgent work of developing an ambitious child poverty strategy, looking at all available levers across government to help tackle the crisis.”

But the government has so far refused to drop the two-child limit on benefits, which is commonly called the two-child benefit cap, but is different from the benefit cap which puts a limit on the amount that people can receive in benefits.

The two-child limit was implemented by George Osborne when he was chancellor in 2015. Seven Labour MPs had the whip removed for voting for it to be scrapped last month.

The Big Issue has reported extensively on the calls to scrap the two-child limit and, as pressure builds on the government ahead of the Autumn Statement, we will platform the voices of families most impacted by the policy and put them at the heart of the conversation.

Thea, whose children are nine, two, and 10-months, says: “My family doesn’t qualify for the same distribution of benefits as other families because I’ve had ‘too many children’. There’s this guilt placed on you, like you’re a bad person and now you have to pay the consequences for the rest of your children’s lives because you messed up. 

“It’s like wearing a scarlet letter. It just feels like everybody wants to see me as some freeloader who messed up, who thought that the world would take care of the extra child. Parents do not need this messaging.”

‘Would you really plan your family around government policy?’

Labour is focused on supporting families into work to reduce the welfare bill, but around 57% of families impacted by the two-child limit on benefits already have at least one parent in work, according to HMRC.

Thea is on maternity leave but is an account development manager in the global mobility industry. Although her salary is around the average for London, she is the only earner in her household and it is not enough to feed her children and keep them warm. 

Universal credit is a lifeline and means she can survive, but research shows that the benefit is too low for families to cover the cost of living. The two-child limit means she has received no extra universal credit since having her third child, and she has had to make her income stretch even further.

Thea’s third child was unplanned following a contraceptive failure, but he was wanted and loved. Thea tells me: “I find it amazing when people say: ‘Did you know about the two-child limit when you decided to proceed with your pregnancy?’ Would you really plan your family around government policy?”

Single parents are disproportionately represented

Thea is far from alone in feeling this way. Anna, a single mum of three children aged between two and seven, tells me she knew about the two-child benefit cap before she had her youngest child, but she could never have contemplated the “full impact it would have”.

“I can’t afford as much for my youngest as I can for my other two, and I end up going into their money to get things for him,” Anna, who is 26, says. “I feel guilty because I can’t afford the things they want to do.”

Anna has her own catering business but she cannot afford childcare so has to stay home and look after her children, and while her mother can offer some financial support, she cannot help with childcare because she works full time.

Half of families affected by the two-child benefit cap are single parents, HMRC research shows – because they are more likely to rely on benefits because of the difficulties balancing work and childcare.

Ruth Talbot, the founder of Single Parent Rights, says: “Single parents are disproportionately represented. It’s not because of this feckless single mum story right-wing media try to tell, but it’s because of the discrimination that single parents face – like being rejected from jobs because they’re single parents, or if you’re disabled or a carer and you can’t work.”

Talbot, who also claims universal credit and has three children, adds that the benefits system should protect people when life does not go to plan. 

“Everyone should be supported if things in life change,” she says. “People die. Relationships break down. People become disabled. People say you shouldn’t have kids if you can’t afford them. What are they actually saying? If you think that through, are you saying you should have enough insurance to mean that if your partner dies or you become disabled, you can pay off your mortgage or buy a house outright?

“At the end of the day, the impact on the children is not fair. Morally, it’s not fair. If you are saying those children deserve fewer opportunities, that’s only going to have a long-term impact on outcomes.”

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Anna finds it difficult not to compare herself to other families at her kids’ school. There’s not so many single parents, and there’s a lot of clubs, and I feel like I’m stretching myself so much to get them into the clubs and do the things that their friends are doing,” she says.

“I’m still motivated to make my life better, but it makes me feel a bit rubbish sometimes. It does feel unfair to my youngest to not have that extra support.”

This is a feeling Thea understands. “It’s kind of like a bubble. All the kids are living in bubbles, but for some kids, the bubble is thicker than other bubbles. And our bubble is stretched so thin I feel like it could pop at any moment. It’s impacting us not just materially but emotionally. I’m more stressed,” she says.

“I don’t have the patience to help my oldest with his times tables or listen to his random stories. He really needs me to be there for him. It’s the same with my daughter. She’s a toddler. You really need patience, and I feel like I’m not able to be that parent that I wanted to be or that my kids deserve.”

‘The benefits system is a hamster wheel’

There are more than 4.3 million children living in poverty across the UK. Barnardos’ Perry says she is hearing stories of children going to school hungry, and others not going to school at all because their parents cannot afford school uniform. 

The charity has estimated that more than one million children in the UK either sleep on the floor or share a bed with their parents because their families cannot afford to replace broken bed frames or wash mouldy linen.

Perry said Barnardo’s would like to see the two-child benefit cap scrapped, but that more must be done to reduce child poverty more widely. She backs calls for the government to introduce an ‘essentials guarantee’ in universal credit, so that families can afford the basics they need to survive at the least.

The Joseph Rowntree Foundation estimates that the standard rate of universal credit falls short by around £120 each month of the money people need to afford the essentials.

Thea has to rely on charitable support, like the baby banks run by Little Village, for basics. She says: “I find the benefit system a little bit of a hamster wheel, or a lot of a hamster wheel, because it’s so confusing and hard to navigate. It’s hard to plan. It’s hard to budget. It’s hard to know what you have to work with. Prioritising is difficult. Will I be able to send my kid to drama club next term? Or can I tell my son he can look forward to a holiday club? 

“I feel like I can’t let my kids in on the plans, because there are no plans. We’re kind of living month to month. And it’s stressful for me, because I don’t even know how long we can stay in our apartment. I don’t know what’s going to happen to us if we can’t afford to stay there. There’s no security, and even if we didn’t get more money, having more visibility of what was going to happen to us financially would help.”

The chancellor Rachel Reeves recently announced a £20bn spending hole left behind by the Conservative government, and she said that would mean “difficult decisions” have to be made around welfare.

Dropping the two-child benefit cap in full would come at a cost of £3.6bn in 2024-25, the Resolution Foundation has estimated. But that’s about 1% of the total welfare bill and would mean savings for public services and a boost for the economy in the long term. The long-term costs to society of entrenched child poverty are “staggering” at around £39bn annually.

Perry says: “There will be some competing pressures and priorities. I have absolutely no doubt of that. All I would say is there are some very long term, enduring impacts of child poverty. And an investment in our children early that lifts as many of them out of poverty as we can is an investment that is going to have a long-term return.”

Thea adds: “The message we should be getting from the government is: ‘Thank you for caring for these children. Thank you for raising them so that they can become taxpayers and have good jobs and perform heart surgery on us when we need it.’ 

“I feel like we’re doing such a good thing, and yet we’re being told that we’ve done a bad thing, and now we have to suffer for the rest of our lives, and we can’t crawl out of this hole.”

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