The Department for Work and Pensions has given ground on its controversial provision to only provide child benefit for the first two children of those receiving welfare support.
In a speech on Friday, work and pensions secretary Amber Rudd said children born before the government began rolling out Universal Credit in April 2017 would be exempt from the policy. The two-child limit, which will come into force in February, will still apply for children born after that cut-off date.
Rudd said the change would affect some 15,000 families, and mean that “by removing any retrospective application, the two-child policy retains its fundamental fairness”.
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Rudd said capping the number of children supported under Universal Credit, which will merge six existing workage benefits including the child tax credit, was justified because “most families make a conscious decision about how many children they have, considering in part their income and the additional costs each child will bring”.
Rudd also confirmed reports that she was scrapping a vote on legislation to begin transferring all people claiming benefits under the old system onto Universal Credit.
The mass migration of claimants will now not begin until a pilot of 10,000 people has been completed, Rudd said. The six-month pilot will begin in July and “will inform our next steps”, she said.
She suggested the department may take a phased approach to the so-called managed migration process after the pilot, but that DWP would still meet its deadline of moving all claimants onto the new system by the end of 2023.
“I will consider carefully the results of the pilot, and its implications for scaling-up migration,” she added.
“It would not be sensible to move immediately from the pilot phase of 10,000, to full scale managed migration.”
The move represented DWP taking a “more considered approach” to the policy’s implementation, so the department could provide “a better service for everyone moving onto Universal Credit from the old system”, Rudd said.
“I know there is more to be done to support the most vulnerable, and finesse the system – so that Universal Credit truly works for everyone,” she said.
Work and Pensions Select Committee chair Frank Field welcomed the scrapping of the retrospective cap on child support, which he said “could have been the cruellest benefit cut in history”.
"At the eleventh hour, [Rudd] has prevented thousands of children from being plunged into poverty by an unjustifiable retrospective policy,” he said.
However, shadow work and pensions secretary Margaret Greenwood said it didn't go far enough called for the two-child cap to be scrapped altogether. "Universal Credit is clearly failing and the government should stop the roll out now," she said.
Finessing the system
Announcing the changes at a Jobcentre Plus in Kennington, Rudd said Universal Credit “began with near universal support – across party lines, and from charities and stakeholders”.
But she hinted at the policy’s tumultuous implementation, which has been beset by delays and criticism since it began, adding: “I want Universal Credit to retain that support as we deliver it in practice.”
MPs, charities and the Work and Pensions Select Committee have criticised the reform amid fears it could push people into financial hardship
DWP has made several changes to the programme in recent months, partly based on the advice of its independent advisers, the Social Security Advisory Committee. In November it said it would adopt SSAC recommendations to fund additional testing of the managed migration process and increase "bridging" payments to out of work claimants to ensure they didn't face a gap before receiving their first Universal Credit payment.
And the chancellor, Philip Hammond, was forced to announce a multi-billion pound funding increase in last year’s budget, amid calls to pump more money into the system – including from within the Conservative Party.
During her speech, Rudd insisted the government would press ahead with its reforms. “Despite what some people suggest, the legacy system – six different benefits administered by three government departments – was not a utopia that we should return to,” she said.