The Scottish government will effectively scrap the two-child benefits cap north of the border from March next year, ministers have announced.
The UK-wide policy prevents parents from claiming universal credit or child tax credit for more than two children, with a few exemptions.
The Scottish government will mitigate the cap by offering payments to affected families, with applications opening on 2 March 2026.
Social Justice Secretary Shirley-Anne Somerville said the move would help keep 20,000 children out of relative poverty.
The payments are expected to start in the weeks leading up to next year’s Scottish Parliament election.
What is the two-child benefits cap?
The two-child cap prevents most families from claiming means-tested benefits for any third or additional children born after April 2017.
It was introduced by Conservative ministers as part of cost-cutting measures. It has been kept in place by Sir Keir Starmer’s Labour administration.
However, Labour ministers have indicated in recent months that they could scrap the policy.
Somerville told BBC Scotland News: “Families can’t wait any longer, they’ve waited for the UK government and there’s been no action.
“That’s exactly why the Scottish government is stepping in.”
The mitigation payment will be offered as a separate benefit, administered by Social Security Scotland.
In its Budget announcement last year, the Scottish government vowed to provide payments to families affected by the policy by April 2026, or earlier if possible.
It said it needed data and assistance from the UK government before it could introduce the payments.
The Scottish Fiscal Commission has estimated, external that 43,000 children in Scotland will benefit from mitigation of the cap in 2026-27. It predicts this will cost £155m in that year, rising to almost £200m by 2029-30.
The Institute for Fiscal Studies has estimated, external that mitigating the policy would reduce relative child poverty in Scotland by 2.3 percentage points, equivalent to 23,000 children.
The think tank described removing the cap as a “highly cost-effective policy”, with an estimated annual cost of £4,500 per child lifted out of poverty.
Scrapping the two child limit to help end child poverty – gov.scot
