The Scottish government has recently confirmed its plans to ditch the controversial two-child benefits cap from next March. Notably, this policy change means that families in Scotland will now be able to receive means-tested benefits for extra children born after April 2017. It has the power to override a damaging UK-wide policy that restricts parents to universal credit or child tax credit for no more than two children, with rare exceptions.
Scottish Social Justice Secretary Shirley-Anne Somerville made the most thrilling of all potential announcements. The government must begin compensating families affected by the two-child cap to mitigate the harm caused. The Scottish government will begin accepting applications for these payments on March 2, 2026. This could be a monumental step in Treasury’s commitment to combatting child poverty.
Somerville called attention to the urgent need for this kind of initiative. It means that it is the fastest delivery of any new social security benefit in Scotland’s history. She noted, “We know that this is a challenging fiscal settlement but we know we need to invest in people and that is exactly what this policy will do.”
The policy change aims to reduce child poverty in Scotland significantly. The Scottish government’s estimates suggest that scrapping the cap would lead to 20,000 children fewer living in relative poverty. Somerville further stressed the value of this countermeasure, especially in providing support to families that typically find themselves in very unstable financial circumstances.
John Dickie, Director of the Child Poverty Action Group, welcomed the move warmly. He stated, “It is absolutely right that the Scottish government acts to effectively scrap the UK government’s two-child benefit limit in Scotland. Families affected, most of whom are working, are facing real hardship and the sooner these payments can be made the better.”
Dickie’s organization’s D.C. think tank lab removal of the cap a “highly cost-effective policy.” They reckon it would be only £4,500 a year to take each child out of poverty. This investment directly complements the Scottish government’s long-term strategy of ensuring the Scottish welfare provision is the best in the UK. With an annual budget of £1.5 billion, Scotland makes guarantee their support is more generous relative to the rest of the UK.
The Scottish government is expected to formalize its decision regarding the cap in the autumn when it publishes its comprehensive child poverty strategy. The announcement has been met with a very positive response — bordering on jubilation — from opposition parties. Scottish Conservative social security spokesperson Liz Smith slammed the shift as putting an ‘unfair burden on taxpayers’. She remarked, “At a time when Scotland is already facing higher levels of economic inactivity, the SNP should be focused on providing incentives for work, rather than hitting hard-pressed Scottish taxpayers with unsustainable costs.”
Scottish Labour’s Paul O’Kane pointed out a chilling truth. He pointed out that after 18 years in power, the SNP have only been able to reduce relative child poverty by just 1% when taking housing costs into consideration.
The UK government has no response so far to the Scottish government’s radical decision to remove the two-child benefits cap. Prime Minister Sir Keir Starmer previously indicated his willingness to explore “all options” to address child poverty, suggesting a potential dialogue between devolved and central governments on this pressing issue.
