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Changes to Two Child Limit rules from 28th November 2018

HMRC will contact all CTC claimants who have added a third or subsequent child to their award since 6 April 2017 to advise them of the extension to support. The letter we are issuing will invite those who think they may be affected by the policy change to get in touch with our specialist team. We are already in touch with a number of families who are likely to benefit from this change. In both CTC and UC, all individuals who qualify for the extension, will receive payment for their third or subsequent child from the date the child, or children, were added to their award.
 
Anyone who thinks they have been affected by the previous policy should contact either HMRC (if they are claiming CTC) or the Department for Work and Pensions (if they are claiming UC or Income Support) to inform them of this. This could include those whose first or second child is adopted or in a non-parental caring arrangement, who also have a third or subsequent child for whom they were not previously receiving a child amount.

The 'Two Child Limit' rules have been relaxed from 28th November 2018, so that claimants can receive a Child Element in a Child Tax Credit, Housing Benefit or Universal Credit award for any children who are adopted or cared for, for each of their eldest two children, plus any third or subsequent children who qualify for an exception.  

Previously, the exception to allow a Child Element for a child who has been adopted* or who is being looked after under a kinship care / non-parental care arrangement only ‘worked’ if the child to whom the exception applied was child number 3, 4, 5 etc in the ‘pecking order’.

There will be families who adopted / became kinship carers for one or two children first, and then went on to have their own biological child/ren. The exception did not previously work for that situation; they would not have received a Child Element for their own children if two Child Elements were already included.

This change means that in the above scenario, the family will get a Child Element for their first and second biological children (and for a third, fourth etc child if the multiple birth / non-consensual sex exception applies) and they would also get Child Elements for any children who have been adopted or are being looked after under a kinship care / non-parental care arrangement.

*Adoption - only applies to children adopted within the UK (see site for more details).

Q. How will the families who have missed out so far be picked up by the DWP / Tax Credit Office / HB Office when the rules change?
A. We asked HMRC and DWP and this is the answer we got: 
'HMRC will contact all CTC claimants who have added a third or subsequent child to their award since 6 April 2017 to advise them of the extension to support. The letter we are issuing will invite those who think they may be affected by the policy change to get in touch with our specialist team. We are already in touch with a number of families who are likely to benefit from this change. In both CTC and UC, all individuals who qualify for the extension, will receive payment for their third or subsequent child from the date the child, or children, were added to their award.
 
Anyone who thinks they have been affected by the previous policy should contact either HMRC (if they are claiming CTC) or the Department for Work and Pensions (if they are claiming UC or Income Support) to inform them of this. This could include those whose first or second child is adopted or in a non-parental caring arrangement, who also have a third or subsequent child for whom they were not previously receiving a child amount.'

 

Example:

Mark and Sarah have adopted two children through Social Services as Sarah was told she would not be able to conceive. But she is amazed to discover a few months later that she is expecting her first child - born in July 2017. They did not receive any extra Child Tax Credit because they already had two Child Elements included in their award. However from 28th November 2018, they will be entitled to three Child Elements in their CTC award: one each for the adopted children plus one in respect of the new baby - because both of the other children are adopted. This means an extra £53 a week CTC!

Example:

Farah and Simon have two children: their 8 year old daughter and a 3 year old boy, who they adopted through Social Services in 2017.  Farah has just given birth to a beautiful baby boy. They will be entitled to three Child Elements in their UC award: one each for their biological children and one for the adopted child. Even though their new baby is their 3rd child, for the purposes of the Two Child Limit rule, since 28th November 2018 the adopted child is 'invisible', so the new baby is seen as their 2nd child.

We have lots more information about the Two Child Limit here.