The Department for Work and Pensions (DWP) failed to consider the compounding impact of its plans to cut Personal Independence Payment (PIP) on Universal Credit households hit by the two-child limit policy.
Stark new figures obtained by the Canary show that in combination, the two policies would have decimated tens of thousands of households.
As ministers seek to blame its row-back on PIP for its failure so far to commit to scrapping the two-child limit, the revelation should serve as a major embarrassment for the Labour Party government.
While it ultimately abandoned its cruel PIP proposal in a last-minute U-turn, it once again illustrates the point that the government’s rushed attempts to ram through disability welfare cuts would have had devastating consequences – ones it utterly failed to account for. Worse still, in failing to assess the two in conjunction, it ignored the fact that more than 140,000 children would likely be hit by the two policies at once.
DWP two-child limit policy:
The Conservatives brought George Osbourne’s austerity-fueled two-child limit on benefits into effect in April 2017. The policy restricts households from claiming child tax credits or Universal Credit for more than two children, including those born after the policy’s introduction.
As the Canary’s Steve Topple recently reported, the DWP’s latest data on this from April 2025 showed that:
- 469,780 Universal Credit households were affected by the two child limit policy. This was an increase of 13,520 (3%) on last year.
- There were 1,665,540 children living in the households affected in April 2025, an increase of 37,150 (2%) on last year.
Damningly, single households, female, Black and brown, and disabled households were disproportionately affected. What’s more, nearly 130,000 households had at least one disabled child who qualified for extra monthly amount of Universal Credit disabled child element. In total, the two-child limit impacted 172,550 disabled children getting this.
DWP PIP cuts: a callous eligibility policy
Meanwhile, DWP PIP is a welfare payment that’s meant to help disabled people with their extra costs of living. In practice however, the entitlement often falls woefully short.
The government had originally planned to freeze the benefit. However, immediate backlash at its callous proposal prompted it to quickly ditch this before introducing its Green Paper. Of course, DWP boss Liz Kendall infuriatingly presented this as a major concession. This was all as she laid out a catastrophic catalogue of welfare cuts.
Specifically, it planned to increase the number of points a person would need to score in their DWP PIP assessment. This would have required people to score four points or more in a daily living category to claim this component.
The notorious ‘4-point policy’ would have stripped hundreds of thousands, if not more than a million claimants of access to the disability benefit.
DWP PIP cuts: U-turn chaos
Concerted campaigning from chronically ill and disabled people eventually shamed MPs into opposing it, and eventually, the government into dropping these plans from its bill. However, the U-turn at the eleventh hour – mid-passage of the bill – was not some magnanimous concession. The decision was an entirely cynical move to curb a growing internal MP rebellion, and save face from an embarrassing defeat. In short, it was to obtusely push its remaining bill through parliament.
However, it wasn’t without the Labour Party government managing to propose a grossly unfair two-tier DWP PIP system first. Notably, ahead of its second reading on 1 July, it put forward revisions to its plans for the policy. In particular, these meant the new criteria would only apply to new claimants. Existing claimants would remain unaffected until at least 2030. Of course, its intention was likely always to bring the two in line eventually.
Tens of thousands of disabled people and children caught up in the two policies
The latest figures from April 2025 show that:
- 65,280 Universal Credit households that the two-child limit hits had at least one individual claiming PIP.
Now, the Canary can reveal that 39,600 of those – 61% – did not score four points in any daily living category at assessment. This equated to 41,800 current DWP PIP claimants in total. So that’s more than 40,000 current PIP claimants in UC households affected by the two-child limit who would likely have lost some or all of their PIP under the new rules.
What’s more, there are 148,100 children living in those households. This is out of 235,270 children who live in UC households under the two-child limit with at least one PIP claimant. In summary, 63% of these children would have been in households impacted by the PIP 4-point policy.
And atrociously, it doesn’t look like the DWP actually explored the impact of its PIP cuts on claimants it hits with the two-child limit on UC.
No consideration of the compound impacts
The Canary obtained these PIP-related figures via a Freedom of Information request to the DWP. We also requested that the department breakdown these figures by household earner composition. However, the DWP refused this part of the request claiming it would exceed cost limits under the FOI Act.
In other words, the figures the DWP evidently had to calculate the figures it did provide to the Canary. Of course, what this confirms is that the DWP had not previously estimated this. It means it likely didn’t assess the impact of its reforms on families it hits with the two-child limit.
Moreover, we already know that the department did not consider this in its impact assessment. Moreover, it did not include this in its evidence packs it set out for its Green Paper. Yet, it’s clear the compound harm of these two policies in tandem would have affected huge numbers of children the state keeps in poverty.
Blaming disabled people for the two-child limit
To date, the Labour has maintained the two-child limit. It went so far as to expel MPs who voted against it.
This is despite the fact that the policy is maintaining staggering levels of unconscionable poverty. According to the Child Poverty Action Group (CPAG), scrapping it could immediately lift 400,000 children out of poverty. A further 950,000 children would also be living in less deep poverty thanks to the change.
Government ministers have since shamefully suggested that the U-turn on DWP PIP means it may no longer be able to scrap the two-child limit policy. On 6 July, education secretary Bridget Phillipson was the first to throw disabled people under the bus for this. She told BBC hack Laura Kuenssberg over the PIP climbdown and the two-child limit that:
The decisions that have been taken in the last week do make decisions, future decisions harder.
Then, on 15 July, DWP minister Alison McGovern was cagey on the future of the DWP’s callous poverty-entrenching policy. She echoed Phillipson, stating that:
we will not commit to any policy without knowing how we are going to pay for it.
This was after the Tories – who want to maintain the policy – laid down a symbolic motion in parliament. It saw 344 Labour MPs vote against it, inadvertently implying they wanted to scrap the policy. However, given Phillipson and McGovern’s responses, it seems unlikely it will actually come to fruition.
Instead, as the Canary has previously pointed out, its big plan to reduce child poverty ultimately seems to revolve around forcing more chronically ill and disabled households into work.
Threat of future DWP PIP cuts haven’t gone away
And of course, while the government has currently set aside its DWP PIP plans, it doesn’t guarantee it won’t reintroduce them. Contrary to claims, the DWP did not drop its plans altogether. Instead, it merely postponed them, with the option of bringing them forward again once it meets certain caveats. For instance, one is that disability minister Stephen Timms completes his review into PIP assessments.
Given Timm’s disingenuous back-pedalling on promises to genuine co-production with disabled people on this, it’s not unfathomable that it’s all just a ruse to build the case for some version of the same cuts. Its track record to date gives chronically ill and disabled communities every reason to be wary of this.
Labour: shamefully engineering poverty for disabled people and children
So as it stands, the Labour government looks set to maintain the two-child limit on benefits. It’s also plausible it might backtrack on dropping its DWP PIP cuts at a later date. Yet, these new figures are a damning indictment for both policies. Together, the two repressive policies could harm tens of thousands of chronically ill and disabled people. What’s more, the PIP 4-point policy would compound the injustice of the two-child limit’s state-induced poverty for vast numbers of children.
It demonstrates how little the government understands – or seeks to – about the dire impacts of its policy-making. When push comes to shove, this Labour government is perfectly content to ignore how the DWP’s disgusting cuts and caps interact in the real-world for chronically ill and disabled claimants, and children living in poverty.
Featured image via the Canary
This post was originally published on Canary.