Monday 3 April 2017
New child tax credit rule means a third child born to low income families will miss out on up to £2,780 of tax credit support in April, affecting 8,000 families each month.
From Thursday 6 April 2017 the amount of Child Tax Credit support available to families across the UK will be limited to two children. The measure will affect all households with two or more children that have an additional baby after this date.
New independent analysis by Policy in Practice finds that more than 2 million low-income families are at risk of being hit if they have a third child, 70% of whom are in work.
The measure is set to save the government £1bn per year by 2020, helping it to meet its stated objective to reduce the public deficit and rebalance the finances of the welfare state.
There is no evidence that the policy will have any impact on birth rates. Policy in Practice will track the impact on birth rates in the coming months but find that many potential parents are unaware of the changes.
104,000 third or additional children will be born to these families in the next twelve months. The 8,000 babies born in April will miss out on up to £2,780 of tax credit support.
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