The Two Child Limit Payment (Scotland) Regulations 2026: scrutiny report

The Scottish Government is using its top-up powers to mitigate the two-child limit. An alternative approach would have been to create a type of ‘childhood assistance’ using the new power in the Social Security (Amendment) (Scotland) Act 2025.¹The childhood assistance powers in the Act are still to be commenced. We understand that the top-up approach was chosen to deliver the policy quickly and note that many stakeholders support this approach. Using alternative powers could have allowed greater flexibility in the future, even if initially support was limited to those receiving Universal Credit.

The approach adopted is in keeping with principle (h) – particularly a system that is efficient – as it allows the benefit to go live as soon as possible. But it does not go as far as it might in delivering poverty reduction (principle (e)) because it limits the circumstance in which a Two Child Limit Payment can be made. Therefore, some families subject to the two-child limit will miss out on support.

CPAG estimates that 3,000 families in Scotland are not entitled to any Universal Credit, because of the two-child limit.²These families have an income too high to be eligible for Universal Credit, but if a child element for a third or subsequent child was included in their award, they would be entitled to Universal Credit. These families cannot access the top-up payment, as individuals must first be entitled to Universal Credit for the Scottish Government to apply its powers.

The Scottish Government notes that, in February 2025, 1,500 families claiming Housing Benefit had more than three children. The two-child limit may reduce the amount of Housing Benefit these families receive. The draft Regulations do not contain any provision to mitigate the effect of the two-child limit on a Housing Benefit award because section 80 of the Social Security (Scotland) Act 2018 does not allow the top-up power to be used to make additions to housing-related benefits. Affected families can apply for a Discretionary Housing Payment from the local authority, but there is no guarantee that a Discretionary Housing Payment will be awarded as would be the case for mitigation of the benefit cap or ‘bedroom tax’.

Recommendation 1: To meet the policy intent of mitigating the two-child limit, the Scottish Government should consider what policy instruments would best deliver comprehensive mitigation to all groups currently affected by the two-child limit, including those who are currently ineligible.

The Scottish Government’s policy is to mitigate the two-child limit “as far as possible”.³ For example, the Fairer Scotland Duty Impact Assessment page 2, Equality Impact Assessment page 1, Better Regulation Impact Assessment page 1 . Achieving this requires ensuring that as many families as possible know about the available support and can claim it. In discussions with us, the Scottish Government noted that while signposting is feasible in some cases, they do not have the necessary ongoing data to contact all eligible families. They also lack sufficient data to automate applications for the Two Child Limit Payment.

Many factors can prevent eligible families from claiming. CPAG’s Strengthening Social Security project found that some families do not claim Scottish Child Payment or Child Benefit for third and subsequent children because they mistakenly believe the two-child limit applies to these benefits.⁴CPAG in Scotland response to SCoSS written questions, received 31 July 2025

We are therefore concerned that a significant number of families may not know they are eligible for the Two Child Limit Payment. To maximise the policy’s impact, it is important that as many eligible individuals as possible receive support. The existence of the Two Child Limit Payment could be made explicit in places where families are likely to read information or to make other social security claims, such as the five family payments.

Recommendation 2: Social Security Scotland should consider adding Two Child Limit Payment to the joint application form for the five family payments.

Recommendation 3: The Scottish Government should conduct detailed research to identify eligible individuals who have not applied, in order to develop an evidence-based take-up strategy that addresses any claimant gaps.