Universal Credit (UC) is gradually replacing tax credits, and some other social security benefits. Universal credit is now available across the UK and HMRC state that it is no longer possible for anyone to make a brand-new claim for tax credits. The only exception is for certain people who are granted refugee status. Instead, people are expected to claim UC or pension credit depending on their circumstances.  Currently, existing tax credit claimants can continue to renew their tax credits and/or add extra elements to their claim. See our existing tax credit claimants page for more information. Our understanding is that the majority of existing tax credit claimants will move to either universal credit or pension credit by the end of the 2024/25 tax year. You can find out more about this in our universal credit section. 

Updated on 6 April 2024

2 child limit

From 6 April 2017, a two child limit policy was introduced to child tax credit which limits the amount of child tax credit awards. This page explains how the policy works and the exceptions.

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Content on this page:

The 2 child limit policy

In the 2015 Summer Budget the Government that the child element of child tax credit would be limited to two children for those born after 6 April 2017 unless certain exceptions apply.

Prior to 6 April 2017, a child element of child tax credit was paid for each child or qualifying young person that the claimant (or their partner) was responsible for.

The change means that anyone who is responsible for a child born on or after 6 April 2017 will not receive the child element for that child unless:

  • There is no more than one child already on the claim, or
  • An exception applies

The child element of child tax credit will continue to be paid for all children born before 6 April 2017.

Even if the child element is not payable for your child, it is important to still report the birth of your child or a child joining your household to HMRC as soon as possible and no later than one month after it happens to make sure any related payments are not lost or overlooked. This is because the child disability element of child tax credit or the childcare element of working tax credit can still be included. These amounts are not affected by the two child limit policy. It will also mean that if one of your other children move off the claim, the child not receiving a child element may then qualify for a child element. If they are already on the system, this should happen automatically.

Existing tax credit claimants

Anyone who was already claiming child tax credit on 6 April 2017 will continue to receive a child element for each of the children on the claim who were born before 6 April 2017.

Anyone who become responsible for a third or subsequent child born after 6 April 2017 will not receive a child element for them unless one of the exceptions explained below applies. The following examples show how the 2 child limit applies if you are already claiming child tax credit.

Example 1

Dominic and Josie have four children (born in 2008, 2009, 2011 and 2016). Since 2016/17 their tax credit claims have included four child elements – one for each child.

Their 2024/25 tax credit award will also continue to include four child elements – because all of the children were born before 6 April 2017 the family are not affected by the 2 child limit policy.

Example 2

Daisy and Mike have two children born in 2012 and 2015. Since 2017/18 their tax credit awards have included two child elements.

In May 2024, their third child is born. They will not receive a child element for their new child because the baby was born after 6 April 2017 and they are already receiving child elements for two other children.

Example 3

Molly has two children born in 2012 and 2015. Since 2017/18 her tax credit awards have included two child elements.

In May 2024, Molly gives birth to her third child. Under the normal rules, Molly would not receive a child element for her third child because the baby was born after 6 April 2017 and she is already receiving child elements for two other children. However, Molly meets the conditions for a non-consensual conception exception (see below) and so a third child element is included in Molly’s tax credit award.

Example 4

Pete and Millie have one child born before 6 April 2017. In May 2018, their second child Freddy is born. They will receive the child element for Freddy because they are not already claiming for two or more children.

However, if Pete and Millie go on to have a third child in say September 2024, they will not receive the child element for that child unless an exception applies because they will already be claiming for 2 children.

Some tax credit claimants may find themselves responsible for a child through adoption or other friend and family care arrangements. If you are already claiming a child element for two children, you may not receive a child element for them. However, if the child is born after 6 April 2017, they are the third child on your claim and one of the exceptions below applies you will still receive a child element for them.

Example 5

May is a single parent. She claims CTC for her two children who were born in 2010 and 2012 respectively. In May 2021, she adopts a baby. Under the normal rules, she would not receive a child element in respect of her new baby because she is already claiming for two other children. However, she can claim an adoption exception meaning she will receive the child element for all three children.

If May was to give birth to a fourth child in July 2024, she would not receive the child element for that child unless one of the other exceptions applied. This is despite the rules changing in April 2017 following legal action.

The rules become more complicated if you become responsible for a child born before 6 April 2017 when you are already claiming for two children and one or both of them were born after 6 April 2017.

Example 6

Sven and Celine have two children – Anna (born in 2010) and Elsa (born on 1 May 2017). They claim CTC for both children. In August 2024, they adopt a third child – James who was born in 2013. They want to claim CTC for James.

As James was born before 6 April 2017 he is entitled to the child element of CTC – no adoption exception is required. However, by adding James to the claim, the child element will be removed from for Elsa. This is because the couple are already claiming the child element for 2 or more children (Anna and James).

However, the rules allow for an exception in this situation – Elsa will receive an exception because she is the third child in the ordering of the children under the rules and all but one of the other children (Anna) are adopted.

Moving in with a new partner

If you are a single claimant and become part of a couple, you will need to inform HMRC as soon as possible and they will end your single claim. A new joint claim is required to continue receiving support. Most people will need to claim universal credit in this situation, or pension credit (depending on your age). This is because tax credits are being replaced by universal credit. However, we have included the examples below to show how the rules worked when a new tax credit claim was possible.

Example 7

William is a single parent with two children – Ross (born 2010) and Jennifer (Born 2012). He claimed tax credits in 2019/20 and his claim included a child element for each child. In July 2020, William moves in with Victoria who also has two children – Rachel (born 2012) and Devin (born 2014). Victoria’s tax credit claim also included two child elements.

In July 2020, both single claims are ended and the couple make a new joint claim. As all of the children were born before 6 April 2017, the couple will have four child elements included in their new claim.

However, a newly formed couple could receive fewer child elements than they were previously receiving as single claimants if any of the children are born after 6 April 2017.

Example 8

John is a single parent with two children – Jason (born 2010) and Janna (born 2012). He claimed tax credits in 2018/19 and his claim included a child element for each child. In September 2019, John moves in with Christine who also has two children – Connie (born 2014) and Christopher (born May 2018). Christine’s tax credit claim also included two child elements.

In September 2019, both single claims are ended and the couple make a new joint claim. However, they will only receive 3 child elements – for Jason, Janna and Connie. They will not receive a child element for Christopher and the 2 child limit policy applies and none of the exceptions (see below) apply.

Exceptions to the 2 child limit

Children born after 6 April 2017 and who are classed as the third (or subsequent) child on the claim may qualify for an exception so that a child element can be included for them.

When working out if a child is the third child on the claim in order to claim an exception, an ordering process is used starting with the earliest date first. The date used will either be the date of birth of the child (if the claimant is a parent or step-parent of the child) or the date the claimant became responsible for that child) in any other case.

There are six exceptions:

  1. Multiple birth
  2. Adoption
  3. Non-parental care arrangements
  4. Where a child of the claimant has a child of their own
  5. Non-consensual conception
  6. Another child/children are covered by an exception

Multiple birth

The purpose of the multiple birth exception is to recognise that families do not normally plan for a multiple birth.

In some cases, a multiple birth will not need an exception. For example, if you have twins and claim CTC for the first time – the twins will each receive a child element because you are not already receiving a child element for any other child.

The multiple birth exception will be needed where:

  • You already have at least one child already on the claim and you have a multiple birth
  • You have no children on the claim but you have a multiple birth with triplets (or greater).

The first child in a multiple birth will only get the child element if they are the first or second child on that claim. If they are not, then you will not receive the child element. For all other children in the multiple birth (other than the first born) you will receive a child element for each of them due to the multiple birth exception as long as you remain responsible for at least two children born as part of the multiple birth.

The following examples show how the multiple birth exception works:

Example 9

Chester and Roseanne are claiming working tax credit. They have no children. In May 2024, Roseanne gives birth to twins. As the couple are not claiming for any other children, no exception is required and the child element will be paid for each child.

Example 10

Elliott and Justine have two children who were born before 6 April 2017. In May 2024, Justine gives birth to twins – Dexter and Diane. Under the normal rules, no child elements would be paid for either Dexter or Diane, because the couple are already receiving child elements for two other children (born before 6 April 2017).

As Dexter is the first child in the multiple birth and is not the first or second child on the claim – no child element will be paid for him as no exception applies.

However, a child element will be paid for Diane because she is the second child in the multiple birth and the multiple birth exception applies.

Example 11

Rachel and Suzanne are claiming working tax credit. They have no children. In May 2024, Roseanne gives birth to triplets.

The first child would attract the child element of CTC because there are no other children on the claim. The second child would also attract the child element of CTC. However, under the normal rules no child element would be payable for child 3 because Rachel and Suzanne are already claiming for at least two children (child 1 and child 2).

The multiple birth exception means that in this case – a child element would be payable for Child 3.

Adoption

The adoption exception will apply to your child if they have been:

  • Placed for adoption with you (or your partner); or
  • Adopted by your or your partner in accordance with certain legislation

The exception will not apply if:

  • You or your partner were a step-parent of the child immediately prior to the adoption; or
  • You or your partner have been a parent of the child at any time; or
  • The adoption order was made as a convention adoption order under certain legislation; or
  • Prior to the adoption, the child was adopted by you or your partner under the law of any country or territory outside of the British Islands.

Example 12

May is a single parent. She claims CTC for her two children who were born in 2010 and 2012. In May 2024, she adopts a baby. Under the normal rules, she would not receive a child element in respect of her adopted baby because she is already claiming for two other children. However, she can claim an adoption exception meaning she will receive the child element for all three children. 

Non-parental care arrangements

This exception will apply where you or your partner are a friend or family carer of the child. A ‘friend or family carer’ means a person who is responsible for the child and any of the following apply:

  • Is named in a child arrangements order or a residence order as a person with whom the child lives; or
  • Is a guardian appointed under certain legislation
  • Is a special guardian of the child appointed under section 14A Children Act 1989
  • Is entitled to guardian’s allowance in respect of the child
  • Is a person who has a kinship care order in relation to the child
  • Is a person in whom one or more of the parental responsibilities or parental rights are vested by a permanence order made in respect of the child

It can also apply in an informal situation where you have undertaken the care of a child in circumstances in which it is likely that the child would otherwise be looked after by a local authority.

The exception will also apply where you are responsible for the child and any of the first 6 bullets above applied immediately prior to the child’s 16th birthday and since that date you have continued to be responsible for the child.

The exception will NOT apply if you or your partner are the parent of the child or step-parent of the child.

Where a child of the claimant has a child of their own

This exception is intended to cover situations where a child or qualifying young person that you are responsible for has a child of their own. The child tax credit rules allow you to claim child tax credit for your child and their child. This situation is most common where the claimant is the parent of one child who has a child of their own (that is, the claimant’s grandchild).

Non-consensual conception

This exception applies in relation to a child where you are the child’s parent and HMRC determines that your child is likely to have been conceived as a result of sexual intercourse to which you did not agree by choice, or did not have the freedom and capacity to agree by choice and you are not living at the same address as the other party to that intercourse (Person 'B').

The rules go on to explain what ‘did not have the freedom or capacity to agree by choice’ means. It includes (but is not limited to) circumstances which at the time the child was conceived, Person B was:

  • Personally connected to you; and
  • Repeatedly and continually engaging in behaviour towards you that was controlling or coercive; and
  • That behaviour had a serious effect on you

Personally connected in this context means that Person B is in an intimate personal relationship with you or you live together and are members of the same family or have previously been in an intimate personal relationship with each other.

The claimant and Person B are members of the same family if, at or around the time the child in question is conceived:

  • They are or have been married to each other or civil partners of each other
  • They are relatives (within the meaning of the Family Law Act 1996)
  • They have agreed to marry each other (whether or not the agreement has been terminated)
  • They have entered into a civil partnership agreement whether or not the agreement has been terminated
  • They are both parents of the same child
  • They have, or have had, parental responsibility for the same child under certain legislation (Section 3 Children Act 1989 or Article 6 Children (Northern Ireland) Order 1995)
  • They have, or have had, in respect of the same child, one of more parent responsibilities or parental rights set out in certain legislation (Section 1 or 2 of the Children (Scotland) Act 2007)

The behaviour has a serious effect on a claimant if it causes the claimant to fear, on at least two occasions, that violence will be used against them or it causes the claimant serious alarm or distress which has a substantial adverse effect on their day to day activities.

Another child/children are covered by an exception

Following legal action in 2017, the Government announced an additional exception. Under the previous rules, if a family adopted a child or became responsible for a child under a non-parental care arrangement (including looking after a child of their own child) they could not go on to have a further child of their own and claim the child element. The Government announced that it would change the rules to ensure that a family that already cares for children who are adopted or cared for under a non-parental caring arrangement can receive CTC for up to two further children (to whom no exception applies).

As a result, where a child is the third or subsequent child on the claim, a child element will be paid for them if all, or all but one, of the other children or qualifying young people are adopted or covered under a non-parental care arrangement (including a child of a child of the claimant). The criteria for these are set out above. The following examples show how this additional exception works in practice:

Example 13

Harry and Julie have a child, Brooklyn, in 2010. In May 2017, Harry’s nephew Colby comes to live with them (under a non-parental care arrangement). Colby is age 10 (and born before May 2017). A child element is payable for Colby as he is the second child on the claim. In November 2023, Julie gives birth to Ella. As all but one (the one in this case is Brooklyn) are cared for under a non-parental caring arrangement, the couple receive a child element for Ella.

Prior to the rule change, they would not have received an element for Ella because no exception would apply.

Impact of getting an exception for a child

Claiming and being given an exception for a third or subsequent child means a child element for them will be included in the child tax credit award.

Unfortunately, the complicated rules mean that in some cases, getting an exception for one child could cause a child element that is included for another child already on the claim to be lost. This was obviously not the intention when the 2 child policy was introduced and so a special exception ensures the child element will be paid for the ‘displaced child’ (that is, the child who has lost the child element). This will happen where:

  1. The displaced child was born on or after 6 April 2017
  2. Another child on the claim has been given an exception
  3. A child element is not payable for the displaced child because child elements are already payable for at least two other children in the claim but that would not be the case if the excepted child was disregarded
  4. The claimant(s) was already responsible for the displaced child before the date they became responsible for the child with the exception

The following example shows how this special exception works in practice:

Example 14

Nancy is a single parent who is claiming CTC for two children:

  • Joanna: born in October 2013
  • Keaton: born in May 2017

In July 2024, Nancy has a third child – Callum. Under the normal rules, Nancy would not receive a child element for Callum because she is already claiming for two other children. However, the circumstances surrounding Callum’s conception are such that the non-consensual conception exception applies. This means that Nancy is entitled to the child element for Callum.

However by adding a child element for Callum, Keaton loses his child element. This is because Keaton was also born after 6 April 2017 and a child born after that date can only qualify for a child element if:

  • There is no more than one other child on the claim; or
  • An exception applies

Now that Callum is on the claim, Keaton fails to qualify because there are two other children on the claim. However the special exception rules mean that Keaton can qualify for a child element because he was born after 6 April 2017, Callum has been given an exception, Keaton would qualify for a child element if Callum were disregarded and Nancy was responsible for Keaton before she became responsible for Callum. 

How to claim an exception

You should claim the exception at the time you add the child to the claim to avoid missing out on some payments of child tax credit. HMRC have confirmed to us that they will backdate the exception to the start of the tax year in which the exception status is reported (if it is after the child is added to the claim) in all cases. In cases where the exception needs to go back further, HMRC will consider the circumstances of the delay in reporting.

HMRC will require evidence that the child meets the exception conditions in most cases except for multiple births (which can be established from information already given). Evidence requirements will depend on the exception claimed:

Adoption – evidence requirements

HMRC will ask to see a copy of the adoption certificate. If this is not available written evidence from a social worker which includes the date the child was placed with the claimant, the name of the child and the name(s) of the adoptive parents should suffice.

Non-parental care arrangements – evidence requirements

Where there are formal care arrangements by family and friends carers, for example a Child Arrangements Order or a Guardianship order, a copy of the order can be used as evidence.

Where the arrangement is informal the exception will only apply if it is likely that the child would otherwise be looked after by a local authority. HMRC require a form to be completed from a registered social worker. However, as far as we can ascertain, there is no legal requirement that states it must be a registered social worker who confirms that the child would otherwise be looked after by a local authority.

Non-consensual conception – evidence requirements

HMRC staff should not question any tax credit claimant about the incident other than to deal with the claim and the supporting evidence. There are three ways to provide evidence for this exception:

  • By providing evidence of a conviction for rape or controlling or coercive behaviour in an intimate or family relationship, where this relates to the non-consensual conception of the child; or
  • Providing evidence of an award made under the Criminal Injuries Compensation Scheme in respect a relevant criminal injury sustained by the claimant where it appears likely that the criminal injury was caused by the other parent of the child and resulted in the conception of the child or diminished the claimant’s freedom or capacity to agree by choice to the sexual intercourse which resulted in that conception.
  • By having a form completed by a third party professional. You will need to take the form to the professional from a specific charity, health care professional or registered social worker. The third party will need to confirm that your circumstances are consistent with the non-consensual conception conditions. You will also need to sign to say you are not living with the other parent of the child you are claiming the exception for.

The 2 child limit and other benefits

There is some information about the 2 child limit in universal credit on our website for advisers.

The 2 child limit policy also affects income support, jobseeker’s allowance and housing benefit claimants whose applicable amount includes an amount for a child or qualifying young person. Similar rules apply in respect of exceptions for the third child. For housing benefit claimants, the exception will be based on any exception given by HMRC for child tax credit.

The 2 child limit policy does not apply in pension credit.

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