Ask CPAG Online - how does the two-child limit apply to housing benefit?

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

When does the two-child limit apply to housing benefit?

The two-child limit applies to all housing benefit claims and awards from 6 April 2017. This means that it can affect you both if you are making a new claim or are already getting housing benefit.

From 6 April 2017, in general you can only get personal allowances included in your housing benefit for a maximum of two children in your family, unless an exception applies. You can continue to get personal allowances that are already included on 5 April 2017, or that are included in your child tax credit.

You can get a personal allowance for:

  • your first and second child, whenever they were born;
  • any child, including a third or subsequent child, for whom a child element is included in your child tax credit claim (this will include any such child born before 6 April 2017);
  • any child, including a third or subsequent child, already included in your housing benefit on 5 April 2017, where you (or your partner) were responsible for three or more children and have not made a new claim since – see What if you already have three or more children? below;
  • a third or subsequent child to whom the two-child limit applies, but to whom an exception applies. An exception applies only if an exception for that child has been applied regarding that child in your claim for child tax credit. It does not matter if you are not actually entitled to any child tax credit. See What are the exceptions?

The main rules about the two-child limit in housing benefit are in regulation 7 and regulation 8 of the Social Security (Restrictions on Amounts for Children and Qualifying Young Persons) Amendment Regulations 2017.

What if you already have three or more children?

If your child tax credit includes a child element for a third or subsequent child, you will get a personal allowance for that child in your housing benefit.

Otherwise, the key is whether you were entitled to housing benefit on 5 April and you or your partner was responsible for a third or subsequent child. The main rule about this is in regulation 9 of the the Social Security (Restrictions on Amounts for Children and Qualifying Young Persons) Amendment Regulations 2017.

If you were, then whilst your housing benefit claim continues you continue to get a personal allowance for that child (i.e. the two-child limit will not apply to them). The rules call such a child a ‘protected individual’. However:

  • this protection stops if you make a new claim for housing benefit. In this event, your third or subsequent child is no longer a ‘protected individual’. The two-child limit applies, so that a personal allowance for them is not included in your new claim, unless an exception applies;
  • if you have a new child on or after 6 April (or a new child otherwise joins your family), the two-child limit applies so that a personal allowance will not be included for that new child, unless an exception applies;
  • for an exception to apply, you must have applied for child tax credit for that child and had the exception applied in that claim.

Example

Geoff is getting child tax credit for his three children. He claims housing benefit in July 2017. The two-child limit does not apply to his housing benefit, as he is entitled to child elements of child tax credit for all three children. If Geoff has another child, the limit may apply regarding that child.

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, whenever they were born. This is the case whether or not you are already getting housing benefit.

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

From 6 April 2017, if you have another child who is your third or subsequent child (or a third or subsequent child otherwise becomes part of your family) the two-child limit may apply regarding them. In that case, you will not get a personal allowance for them, unless an exception applies. The two-child limit does not apply regarding a third or subsequent child if you are entitled to a child element for them in child tax credit. This will include any such child who was born before 6 April 2017, or who was born after that date and to whom an exception applies for the purposes of child tax credit.

Example

Usha has two children in her housing benefit claim from December 2016. On 10 April 2017, she gives birth to a third child. Usha is not entitled to a child element of child tax credit for the new child unless an exception applies, as the child was born after 6 April 2017.

If an exception does not apply, the child is not a ‘protected individual’ in Usha’s housing benefit, as the child was not included in the claim on 5 April 2017. In that case, the two-child limit applies, and Usha does not get a personal allowance for her new child.