In a major shift in social policy, the Scottish government will end the controversial two-child benefits cap by March 2026. This decision is set to provide financial relief to thousands of families, particularly those impacted by the cap that limits child benefit payments to two children.
The move, aimed at reducing child poverty, has been welcomed by campaigners but also raises questions about its long-term sustainability. The two-child cap, introduced by the UK government in 2017, prevents families from receiving universal credit or child tax credit for any third or additional children born after that date.
The policy was implemented as part of a broader cost-cutting effort but has faced widespread criticism for its impact on the most vulnerable. Scotland’s decision to mitigate the cap demonstrates its ongoing commitment to reducing child poverty and providing more generous welfare support than the rest of the UK.
A Much-Needed Mitigation to Tackle Poverty
According to Social Justice Secretary Shirley-Anne Somerville, the Scottish government’s new policy will help keep 20,000 children out of relative poverty. By offering direct payments to affected families, Scotland seeks to address the hardships caused by the cap.
The scheme will open for applications in March 2026 and is expected to cost between £140 million and £150 million in its first year. Somerville explained that the initiative is an investment in the country’s future, directly helping families struggling with the cost of living.
The payments will be administered by Social Security Scotland, which already oversees various welfare programs aimed at alleviating financial pressure on low-income families. This initiative is seen as an important step, particularly in light of Scotland’s already substantial £1.5 billion annual expenditure on welfare measures.
A Wider Impact on Child Poverty and Welfare
The Scottish government’s approach is expected to have a notable impact on child poverty rates in Scotland. According to the Scottish Fiscal Commission, around 43,000 children will benefit from this policy in the 2026-27 period. Mitigating the two-child cap is projected to reduce child poverty by 2.3 percentage points, benefiting approximately 23,000 children.
Campaigners from the Child Poverty Action Group in Scotland have praised the government’s decision, emphasising that many of the affected families are already working and struggling to make ends meet.
While the UK government has yet to act on the policy, calls for its immediate reversal have intensified. Prime Minister Sir Keir Starmer has stated that his government will consider all options to address child poverty, with further announcements expected in the autumn.
