Two child cap will not apply to Council Tax Reduction Scheme

The Scottish Government has announced it will not apply two child cap to Council Tax Reduction Scheme.

A number of UK Government changes come in to force today, which will cut the benefits people in Scotland are entitled to.

The changes will see child tax credits capped at two children – meaning anyone with two children or more will no longer receive child tax credits at the birth of their next child or subsequent children, unless an exception applies. This policy also affects those making a new claim to Universal Credit.

The Scottish Government announced today that the two child cap would not be implemented in Scotland’s Council Tax Reduction Scheme. This scheme reduces the council tax those on low incomes have to pay, with over 75% of recipients not having to pay any council tax at all.

On a visit to meet single parents and families in Glasgow, Social Security Minister Jeane Freeman said estimates showed the two child cap to tax credits will drive up child poverty by 10%.

Ms Freeman said:

The welfare system is supposed to be there to look after people when things happen in their lives that mean they need financial help to get through periods of difficulty.

Just the measures being introduced today will take around £200 million out of Scotland’s welfare budget each year by 2021-22. The squeeze will be felt most by families with children, young people and those who have already been hardest hit by continuing UK Government austerity.

As the Scottish Government take steps to eradicate child poverty, we do so in the face of these cuts which will push even more families into poverty.

And while we relish the opportunity to take control over a portion of the benefits that will be devolved to Scotland, we still will not have the powers to stop these ideologically-driven cuts going ahead. Especially as our budget continues to reduce in real terms.

Where we do have control, such as over the Council Tax Reduction Scheme, we are refusing to follow this callous two child cap policy. I’ve announced today that the Scheme will not have a two child cap – we will not penalise people for having more than two children.

I’ve committed to putting dignity and respect at the heart of our new system and we recognise that it is our job to support people to get back on their feet, not make it more difficult.

It’s time the UK Government did the same, and listened to the concerns that people are raising in Scotland and across the UK about the harsh injustice of their policies.

Other changes to be introduced on 6 April include:

  • the premium payment for the first child will no longer be awarded for new births in families in receipt of child tax credits and new Universal Credit claimants.
  • shortening the time that parents who are on Universal Credit can spend at home with their youngest child before having to look for work;
  • reducing the amount of money people with work-limiting disabilities or health conditions who make a new claim to employment and Support Allowance and are placed in the work related activity group can receive.
  • In addition, the entitlement to housing benefit for 18-21 year olds was changed on 1 April.

Satwat Rehman, Director of One Parent Families Scotland, said:

Rising child poverty is a scar on our society, and is projected to rise further, as new benefit cuts that could cost the hardest-hit single parents more than £6,000 by 2019, are set to come into force today.

The changes will put a terrible burden on families across Scotland. It is Westminster government action – rather than merely inaction – that is actively driving down the life chances of single parents and their children.

OPFS believes urgent changes are needed to turn the tide on child poverty. We are calling on the Westminster government to support families who are struggling on low incomes and rising prices. Ending the freeze on children’s benefits is a crucial first step and as well as the reversal of cuts to Universal Credit.

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