Ask CPAG Online - how does the two-child limit apply to child tax credit?

This section looks at how the two-child limit affects your child tax credit. It looks at what happens if you already have three or more children (including where you are already getting child tax credit) and what happens if you have another child.

 When does the two-child limit apply to child tax credit?

The two-child limit applies regarding all third or subsequent children in your family born on or after 6 April 2017. This means that it can affect you both if you are making a new claim or are already getting child tax credit.  Unlike for universal credit, there are no special arrangements or rules about making new claims where you already have three or more children, or about a third or subsequent child born before 6 April 2017. This is mainly because if a child was born before that date then for child tax credit the two-child limit can never apply regarding them.

From 6 April 2017, if you have a third or subsequent child who was born on or after that date, you cannot get a child element for them, unless an exception applies (see What are the exceptions?). You can continue to get child elements already included.

You can get a child element for:

  • your first and second child (whenever they were born, in any case where you have no more than two children);
  • any child, including a third or subsequent child, born before 6 April 2017;
  • a third or subsequent child born on or after 6 April 2017 to whom an exception applies.

The main rule about the two-child limit in child tax credit is in regulation 4 of the Child Tax Credit Regulations 2017.

 What if you already have three or more children?

If you are already getting child elements for three or more children in your child tax credit, those elements will continue.

Whether you are already getting child tax credit or making a new claim, the key is whether your third or subsequent child was born on or after 6 April 2017. If the child was born on or after that date, the two-child limit will apply regarding them, and you will not get a child element for them unless an exception applies.

If your third or subsequent child was born before 6 April 2017, you will get a child element for them. However, in that case your entitlement for your first or second child could be affected, but only if they were born on or after that date. You will always get a child element for your first and second child, whenever they were born, whilst you only have one or two children. But if you already have a child born on or after 6 April 2017 and then a third or subsequent child born before that date joins your family (for example if you adopt an older child), you only get a child element for the child born on or after 6 April if an exception would have applied regarding the third or subsequent child. See the example below about Angus and Rhona for how this works. 

Because of the special arrangements that apply to universal credit until 1 November 2018 (see How does the two-child limit apply to universal credit/Special arrangements), if you already have three or more children you are not allowed to claim universal credit for the first time, and are instead advised to claim child tax credit. Again, in this situation what matters for child tax credit is whether your third or subsequent child was born before or after 6 April 2017.

Examples

Sandy is a lone parent with four children, all born before 6 April 2017. She is already getting child tax credit. From 6 April 2017 she continues to get child elements for all four children, as they were all born before that date.

Vicky is a lone parent with two children, both born before 6 April 2017. Her child tax credit includes child elements for both children. In October 2017, Vicky adopts a third child, Gail, from local authority care. Gail was born in June 2017 is regarded as her third child, joining the family after 6 April 2017. Therefore the two-child limit will apply regarding her – but Vicky will get a child element for Gail as an exception applies, namely the one regarding adoption (see What are the exceptions/adoption). Vicky now gets three child elements in total.

Angus and Rhona have two children, one born before 6 April 2017, one (Alistair) born after. Whilst they only have two children, Angus and Rhona will always get child elements for both their children. In July 2017 they adopt a third child, David, from local authority care. David was born in 2015. Because David was born before 6 April 2017, a child element is payable for him. But although Alistair is only Angus and Rhona's second child, a child element might not be payable regarding him, as there are now three children in their family, and Alistair was born after 6 April 2017. However, an exception would have applied to David, as he was adopted from local authority care. Therefore a child element remains payable for Alistair, and Angus and Rhona get a total of three child elements.

John and Kayleigh already have three children when they try to claim universal credit for the first time in December 2017. All their children were born before 6 April 2017.  Because of the special arrangements that apply until 1 November 2018, they are not allowed to claim universal credit and are instead advised to claim child tax credit. When they do, as all their three children were born before 6 April 2017, they get child elements for all of them.

What if you have another child?

If your new child is only your second child, the two-child limit does not apply regarding them – you always get child elements for your first and second children whilst you only have one or two children, whenever they were born. This is the case whether or not you are already getting child tax credit.

If you form a new family with someone with children of their own, all the children in your new family will count.

If you have another child who is your third or subsequent child (or a third or subsequent child otherwise becomes part of your family) and they are born on or after 6 April 2017, the two-child limit will apply regarding them. So you will not get a child element for them unless an exception applies. in that case, you can still get a child element for your first and second children. In some circumstances, it is possible that the two-child limit could apply regarding your first or second child where a third or subsequent child born before 6 April 2017 joins your family - see the example about Angus and Rhona, above.

Example

Vicky gets child element for all three of her children, even though her third child was born after 6 April 2017 and joined her family in October 2017. That is because an element is always paid for children born before 6 April 2017, and an exception applies regarding her third child, as she was adopted from local authority care.

In October 2018, Vicky forms a couple with Andre, who has one child of his own, Raymond, born in February 2018. Raymond is regarded as the fourth child in Vicky and Andre’s new family. The two-child limit applies regarding Raymond. They will not get a child element regarding Raymond (and continue to get just three child elements) unless an exception applies regarding him.