Universal Credit - mitigation of the two-child limit: consultation analysis

Introduction

Background

The Scottish Government is currently responsible for delivering 15 benefits through Social Security Scotland (SSS), an executive agency of the Scottish Government. However, all existing work-related benefits paid to people in Scotland remain reserved to the UK Government. Universal Credit (UC) was introduced in 2013 and has been available across the UK since December 2018. It is administered by the Department for Work and Pensions (DWP). Currently, Universal Credit is the only option for any working-age individual or family wishing to apply for a means-tested benefit. It is available to those who are in work on low incomes, as well as those who are unemployed or whose capability for work is limited by sickness or disability.

Part of the Universal Credit payment relates to the child[ren] a claimant is responsible for. This is called the ‘child element’. The UK Government only pay the Universal Credit child element for the first two children in a family, except in some limited circumstances. If a third or subsequent child was born after 6 April 2017, then no Universal Credit child element will be paid in respect of that child, unless it was part of a multiple birth (for example, twins), part of a non-parental caring arrangement, or born as a result of non-consensual conception.

DWP statistics show that in April 2024 a total of 1.6 million children in the UK were affected by the two-child limit policy. Meanwhile, the Scottish Fiscal Commission (SFC) estimated that in April 2024 there were around 32,000 children in Scotland recorded on claims for Universal Credit for whom no child element was being paid^[1].

In December 2024, the Scottish Government set out plans to mitigate the two-child cap in Scotland as part of the annual budget statement to the Scottish Parliament^[2]. The proposal is for a ‘mitigation payment’ equal to the Universal Credit child element for each third and subsequent child in Scotland impacted by the two-child cap (currently £292.81 each month).

The SFC estimated that mitigation payments would apply to 42,000 children in Scotland at a cost of £3,609 per child per year in 2026-27, rising to 49,000 children and £3,845 by 2029-30. The forecast includes £3 million in 2026-27, rising to £9 million in 2029-30, for behavioural change, such as families choosing to work fewer hours to remain eligible for Universal Credit, or parents choosing to receive a mitigation payment from the Scottish Government instead of applying to DWP for an exception. On this basis, the SFC estimates the total cost of the policy for 2026-27 at £155 million, increasing to £198 million by 2029-30^[3].

Mitigation of the cap is not a straightforward task, however. It will require significant policy and technical work to develop and implement an appropriate solution. This includes cooperation from the UK Government around systems development, data sharing and legislation. It will also be important to ensure that existing benefits payments from Social Security Scotland and other improvement work is not disrupted or delayed as a result of the introduction and administration of mitigation payments.

In order to develop a strong evidence base to help inform the Scottish Government’s approach to drafting the necessary legislation, a public consultation was conducted to seek feedback on the proposals for mitigation payments. The findings will inform the development of draft regulations, which are expected to be shared with the Scottish Commission on Social Security and laid in the Parliament later in 2025.

The Consultation

The consultation ran for eight weeks, opening on 21 February and closing on 18 April 2025. A few late responses were also accepted after the closing date.

The consultation was available on Citizen Space, the Scottish Government’s online portal for public consultations. In addition, respondents could submit written responses via email or post. One workshop event was also conducted to gather qualitative feedback from individuals with lived experience of the current two-child limit cap on Universal Credit payments.

Four questions were asked in the consultation paper in total, including:

• three which asked both a closed element (e.g. agree/disagree options) and an open element (inviting free text responses); and
• one which sought free text responses only.

Feedback was sought on:

• whether Social Security Scotland should deliver payments to mitigate the two-child cap in Scotland;
• whether the powers at s79 of the Social Security (Scotland) Act 2018 to top-up Universal Credit should be used to mitigate the two-child cap;
• whether payments to mitigate the two-child cap should be disregarded as income by the UK Government; and
• any potential impacts of the proposed approach outlined in the consultation on different groups of people, communities and businesses.

At the workshop event, Scottish Government staff delivered a presentation which set out the proposals and led discussion focused on the same four consultation questions as the main Citizen Space questionnaire.

Profile of Respondents

In total, 271 written responses were received. This included an organisational response which detailed feedback from six service users and staff members collated as part of a survey. This response was separated and entered as six separate responses from individuals to ensure all the discrete question responses could be included in the analysis. Nine duplicate responses were also identified, i.e. where the same respondent had submitted more than one response. These were collated into one response per person, ensuring that no data were lost in the process. Based on the information provided in the Respondent Information Form (RIF), one respondent was also recategorised from an organisation to an individual as part of the data cleaning process.

Ultimately, 267 responses were included in the analysis. Of these, most (n=251, 94%) were received via Citizen Space, while 16 (6%) were received via email or post and manually entered into the dataset.

Most responses came from individuals (n=225, 84%), while 42 (16%) were received from organisations. Organisational responses were allocated to sector categories to support the identification of any differences in opinions between sectors. The table below outlines the profile of organisational respondents by sector.

Breakdown of Responses by Organisational Sector

In addition to the written responses, 10 individuals with lived experience of the two-child cap on Universal Credit attended the workshop event. One participant supporter, from a third sector organisation, also attended. The workshop included two breakout sessions, with six individuals in one session and four individuals and the supporter in the second session. Both breakout sessions discussed the same four consultation questions set out in the main consultation document.

Reporting Conventions and Caveats

Not all respondents answered all questions. In addition, some respondents answered the closed element at individual questions but did not provide free-text comments at the open question element (or vice versa). Respondents may also have participated in the consultation in multiple ways. For example, it was possible for people to attend the workshop event and submit a written response. The small number of people attending the workshop compared to the overall number of consultation responses, however, minimises the risk of bias being introduced due to this. For completeness, all data provided was included in the analysis. Further, all responses were treated with equal weight within the analysis.

Organisations typically provided longer and more detailed responses at each consultation question, often citing more than one issue and/or offering evidence to support their opinion. Individuals tended to provide shorter and more concise feedback at each question, typically outlining one main concern. Where multiple issues were highlighted, these were generally high level and concise.

One organisation had conducted a survey based on the consultation questions, and their response detailed the collated views from various services and departments across their local authority area. The survey elicited around 50 responses. This organisational response outlined the percentage of survey respondents who selected various response options at the closed questions and summarised the qualitative feedback provided at each question. It should be noted that the option selected at the organisational level at each closed question reflected the majority view of the survey respondents involved, however, mixed feedback was generally provided at each question. While another similar response had been received from an organisation that had conducted a smaller scale survey which was converted into six separate individual responses (as discussed above), such conversion was not possible in this case. The exact number of survey respondents providing each closed response was not provided (only percentages were cited), and similarly, it was not possible to identify the number of survey respondents who discussed each of the topics within the qualitative feedback. As such, this response has been retained and analysed as a single organisational response and the data summarised below as appropriate. The feedback from this organisation tended to be more consistent with the views of individuals rather than of other organisations.

The difference in the number of responses received from individuals and organisations needs to be borne in mind when interpreting the results presented in this report. Many more individuals responded compared to organisations. As such, comparisons based on percentages between these two cohorts do not represent similar numbers. For example, 80% of individuals represents a much higher number of respondents than 80% of organisations.

While there was a reasonable response overall from individuals, it should be noted that there was a lack of written responses from those who disclosed that they had lived experience of the two-child limit. This could be due to the way that the consultation was distributed (i.e. largely online) meaning it was not accessible to some, and/or the limited time period available to respond. Often third sector organisations promote relevant consultations to any vulnerable and hard to reach groups that they represent or work with, but the limited time period available for this consultation may have restricted their ability to promote the consultation or undertake any wider engagement with their service users. While the workshop event specifically targeted those with lived experience, this included only 10 individuals. Although the feedback provided at this event was highly valuable, the small numbers overall mean that the insights gathered from this cohort were somewhat limited.

Where respondents gave permission for their responses to be published, these can be read on the Scottish Government’s website.

Where quotes are used in this report, they have been taken from those respondents who gave permission for their response to be published (as per their permission in the Respondent Information Form (RIF)). Where organisational respondents gave permission to be published and named, the quotes are attributed by both the organisational sector and the organisation name. Where organisations gave permission to be published but not named, these are attributed only by organisational sector. All quotes from individuals have been attributed at the individual level, rather than naming people, regardless of the level of permission provided in the RIF.

It should be noted that, this report uses the term ‘parent’ to refer to both parents and carers in the context of families who may be entitled to the mitigation measures and other benefits.

Finally, the findings here reflect only the views of those who chose to respond to this consultation. It should be noted that respondents to a consultation are a self-selecting group. The findings should not, therefore, be considered as representative of the views of the wider population.