The government is pressing ahead with changes which will reduce the support available for many families.
Hundreds of thousands of families will be worse off as a result of the coming changes to Child Tax Credit, Housing Benefit and Universal Credit.
Read our guide below to make sure you understand what is happening and what to do next.
No more Family Element
What is changing?
Current claims for Child Tax Credit include a Family Element which boosts entitlement by up to £21 every two weeks or £42 every four weeks. The equivalent in Universal Credit is the Eldest or First Child Element, which boosts entitlement by up to £45.41 per month.
The Family Element and the Eldest Child Element are being removed for new claims.
When will you be affected?
People starting a family on or after 6 April 2017 won’t get the Family Element in their Tax Credits, or the Eldest Child Element in their Universal Credit. This affects people who are pregnant now and will have their first baby on or after 6 April 2017.
Families who already receive the Family Element or the Eldest Child Element will continue to receive it.
Two Child Limit
What is changing?
Child Tax Credit currently includes a Child Element for each child in the family. Having another child increases entitlement by up to £106.68 every two weeks or £216.36 every 4 weeks. The equivalent in Universal Credit (which is replacing Child Tax Credit) can increase entitlement by up to £231.67 per month for each child. The amount that you actually receive depends on how much income you have.
The upcoming change will mean the Child Element will only be included for the first two children (unless an exception applies). Any other elements, for example the Disabled Child Element, will continue to be included even if it applies to the third or subsequent child.
Will you be affected?
If you have a third or subsequent child added to your claim on or after 6 April 2017, you will not receive the Child Element for them unless an exception applies.
An exception may apply if you adopted a child on or after 6 April 2017 or a child was placed in kinship care with you by Social Services on or after 6 April 2017.
An exception may also apply if your third or subsequent child is:
- a twin or a triplet
- born as a result of non-consensual conception
- the child of your child (who you still receive Child Benefit for)
When will you be affected?
If you are receiving Child Tax Credit, you will continue to receive the Child Element for all children who were born before 6 April 2017. You will not receive a Child Element for a child born on or after 6 April 2017 unless they are the first or second child on your claim, or an exception applies.
If you are on Universal Credit, you will continue to receive the Child Element for all children who were included in your claim before 6 April 2017. You will not receive a Child Element for a child added to your claim on or after 6 April 2017 unless they are the first or second child on your claim, or an exception applies.
Families with more than two children cannot make a new claim for Universal Credit until November 2018, even if they are in a full digital service area. They will have to claim Child Tax Credit in the meantime.
How will it affect your Housing Benefit?
If you are claiming Housing Benefit, your entitlement is reduced by any income which exceeds the ‘applicable amount’. The applicable amount is increased by £66.90 per week or £267.60 every four weeks for every child you have. This means you can earn more before your Housing Benefit is affected.
The applicable amount will not be increased for any third or subsequent child born on or after 6 April 2017 (unless an exception applies).
This change will affect you if you are having a third or subsequent child on or after April 2017 and you are not claiming Income Support, income-based Jobseeker’s Allowance or income-related Employment and Support Allowance, for example, because you are working.
What can you do?
The government is making these changes to encourage people to think more carefully about how they will support their children before they have them.
Make sure you know when the changes will affect you and how much you will be entitled to when they do.
The changes will not affect your Tax Credits straight away unless a child is joining your family on or after 6 April 2017.
The changes will affect you when you make a new claim for Universal Credit from November 2018 onwards.
You can check how you will be affected by the changes by contacting:
- HM Revenue and Customs (HMRC) for Child Tax Credit on 0345 300 3900
- The Department for Work and Pensions (DWP) for Universal Credit on 0345 600 0723
Or you can find a local benefits adviser using our Find an Adviser tool.
Check our Your Situation pages to see what help may be available to you. Remember to look out for Energy Schemes to help with your energy bills. You may also be eligible for help from charitable grants which you can find using our Grants Search.
If you are struggling to pay your rent, read our Discretionary Housing Payment guide to find out about a top-up you could receive from your local council and how to apply.
If you’re really struggling, check out our Emergency Assistance guide for information on other help.
Always seek advice straight away if you are at risk of losing your home. You can find a local housing advisor using our Find an Adviser tool. You can also ask your local council for help to keep your home from their Floating Housing Support Service. Find your local Council on the Find your local Council page of the Gov.uk website.
If you’re not sure whether you can afford to make ends meet and you need advice about what to do next, you can use our Find an Adviser tool to find a benefits advisor near you.