Labour starts dishing out billions in handouts TODAY as two-child benefit cap formally ends

James Saunders
Mon, 06 Apr 2026 01:21:45 +0000

The two-child benefit cap officially comes to an end today, with the Government claiming the move will lift approximately 450,000 children out of poverty.

The policy change carries a price tag of £3.5billion annually for taxpayers - though Sir Keir Starmer is branding it one of his "proudest moments" as PM.

Rachel Reeves confirmed the cap's abolition at her "nightmare before Christmas" November Budget after caving in to pressure from Labour backbenchers.

Under the previous rules introduced by the Conservatives in 2017, parents could only claim universal credit or child tax credit for their first two children.

Eligible families may now receive around £300 monthly for each additional child, with the benefit worth £3,647 per child per year.

And the largest households could qualify for over £10,000 in extra payments each year - all accounted for by the taxpayer.

Meanwhile, Tory analysis has found a household of two unemployed adults and three children would receive a 20 per cent tax-funded pay rise of £6,400 a year.

But Sir Keir Starmer said the move was evidence his Government "stands with ordinary Britons" during turbulent times.

"No matter the global uncertainty, my Government will always be on the side of the British people in bearing down on the cost of living," the Prime Minister said.

"I will never lose sight of how restless people are for change, and I am proud that today we are lifting nearly half a million children out of poverty, boosting support for pensioners, and delivering the biggest upgrade to workers' rights in a generation."

Writing in The Guardian, Sir Keir described the changes as "one of the proudest moments of this Labour Government".

He acknowledged families were worried about the Iran conflict and its impact on living costs, adding that ministers were working with international partners to de-escalate tensions in the Middle East.

Tory leader Kemi Badenoch has led the charge against the multi-billion-pound pay package.

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"While working people struggle with rising fuel costs and food prices, Keir Starmer is giving another handout to those on benefits," she said.

"The Conservatives believe in fairness and that those on welfare should have to make the same choices about their family as those who aren't.

"That's why we would reinstate the two-child cap and use the savings to bolster our Armed Forces."

Her Shadow Chancellor, Sir Mel Stride, branded the move "Rachel Reeves's benefits payday - paid for by working families".

Mrs Badenoch has pledged to restore the cap if the Conservatives win the next election, while Reform UK has pledged to only remove the cap for families where both parents are British-born and employed full time.

Nigel Farage's party estimates this approach would benefit around 3,700 households, compared to the 470,000 families set to be paid under Labour.

The cap's removal coincides with several other Government measures designed to ease cost-of-living pressures.

State pension payments are also increasing, with Labour stating new claimants will benefit by up to £575 annually.

Workers gain immediate rights to paternity leave from their first day of employment under reforms introduced through the Employment Rights Act.

Statutory sick pay rules have also been overhauled as part of the same legislation.

Housing benefit and personal independence payments are among other benefits receiving upratings today.