Who is shielded from the UC two child cap?

Damian Green announced the following on the 20/7/2016…

“…First, it is important to deliver the policy to limit the child element of tax credits and Universal Credit to two children to its planned April 2017 timetable. Therefore, we will direct new claims from families with more than two children to Tax Credits until November 2018. Thereafter, new claims from families with more than two children will be taken through Universal Credit. Families already on Universal Credit who have a third child after April 2017 will remain on Universal Credit and receive two child elements.”

Who is this aimed at? If you live in a Gateway area you would not be allowed to make a new claim for UC anyway because you are a parent, and if you are in Gateway and already on TC and then have a third child, you stay on TC if the relevant change of circumstances is the birth of the third child.

If on the other hand you are in a Full Service area, how can you be ‘directed’ to TC if in those areas legacy benefits no longer exist?

Claimants living in traditional gateway areas will be unaffected but it will make a difference for the 7m+ people living in the modified gateway areas (mostly NW England) where families can currently claim UC.

In the digital areas I guess that it’s possible families with 3+ children will be added to the list of full service area exceptions for whom legacy benefits still exist (See article 7 of the No 23 Order for current exceptions.) Similary the modified gateway conditions could be changed again.

What’s very unhelpful is that there are no regulations and no indication of when these changes might take effect.

Alternatively, instead of changing the regs I guess that it’s possible that the SoS might just use his general discretion under Reg 4 of the TP Regs to keep 3+ child families on legacy.  If so, maybe he’s doing that already?

Even though UC has to be claimed in most situations requiring a new in-work or out-of-work claim in the digital areas, the existence of UC and abolition of ESA(ir)/JSA(ib) still happens on an individual date as and when a person’s circumstances require: the commencement orders do not introduce UC across the board for everyone at a stroke.  Moreover, IS, HB and the Tax Credits have not actually been abolished anywhere as far as I can tell: it is just that there are far fewer circumstances in which you can claim/retain them in digital areas.

So the diversion to Tax Credits can be delayed for people who currently haven’t migrated to UC by amending the commencement orders to prevent UC from commencing if you already have more than two children.

In the gateway areas in North West England and the handful of sites elsewhere, where families with children can claim UC, the gateway conditions can be amended to exclude people with more than two children.

The effect of all this will be that no-one except existing UC claimants will have their benefit restricted to two children anywhere any time soon.  In CTC, the two child limit only applies to children born on or after 6/4/17: this is “hard-wired” into s13 of the WR&W Act.  November 2018 has been mentioned as the time at which new claims to CTC will cease.  It is pretty much impossible for anyone by then to have more than two single-birth children all born since 6/4/17: you would need to give birth very early in the 17/18 tax year and then have two further pregnancies immediately afterwards in order to have three children by November 2018.  The budget documents last year said that exceptions would be made for multiple births.

All of this means that the two-child policy will begin to be phased in very slowly from the end of 2018, in two ways:

- people on CTC who have further children will be caught
- people on CTC will be migrating naturally to UC with greater frequency by then

As for people currently on UC, or who migrate naturally to UC while already on CTC, until we see a commencement order for s14 and any transitional arrangements built into it we don’t really know how the policy will operate.  It may be that it will be restricted in a similar way to CTC, so that it really only applies to extra children arriving on the scene in 2019 and beyond.

PS Just realised: if you already had two or more children born before 6/4/17 you won’t be able to add any further children born after 6/4/17 will you?  Ooops, I completely overlooked that.