Spike in number of households earning the maximum amount of benefits after Labour boosted payouts and scrapped two-child cap

Labour's axing of the two-child benefit limit and boost to welfare payments has seen a spike in the number of families earning maximum payouts, official figures suggest.The number of households on Universal Credit who are subject to the benefit cap increased by 53,000 (48 per cent) between February and May this year.This was also a 47,000 (41 per cent) increase compared with May 2025, according to data from the Department for Work and Pensions (DWP).The benefit cap is a limit on the total amount of benefits you can get and applies to most people aged 16 or over who have not reached state pension age.It is different from the former two-child limit, which ended in April and restricted Universal Credit claims to support for only the first two children in most households.The benefit cap does not apply to all welfare claimants, such as people who receive Universal Credit because they are disabled or they care for someone with a disability.The cap currently stands at £1,835 per month for couples and single parents outside Greater London, or £2,110.25 for couples or single parents in the capital.The two-child benefit limit formally ended on 6 April after being scrapped by Labour - the same day that most Universal Credit rates increased by 6.2 per cent. The number of households on Universal Credit who are subject to the benefit cap increased by 53,000 (48 per cent) between February and May this yearOf capped households with children in May 2026, the majority had three children. By comparison, the majority in February 2026 had two childrenThe London region continued to have the highest proportion of Universal Credit households affected by the benefit capThe DWP figures, published on Tuesday, showed there were 160,000 households on Universal Credit who were subject to the benefit cap in May this year.'This coincides with annual uprating, 'rebalancing' of Universal Credit and changes to two child limit policy' while 'benefit cap levels were unchanged', the department said.Of the 160,000 households being capped in Universal Credit in May, 88,000 were on the benefit cap in February this year, while 58,000 started on the benefit cap for the first time between March and May 2026.Eight in 10 (81 per cent) of households that had their Universal Credit capped in May included children.Of these, 94 per cent (120,000) had between one and four children and 6 per cent (8,300) had five or more children. Of capped households with children in May 2026, the majority had three children. By comparison, the majority in February 2026 had two children.Overall, households with two or fewer children accounted for a smaller proportion of households being capped in May this year than in February.The proportion of capped households claiming Universal Credit in May was 2.3 per cent, compared with 1.5 per cent in February.The London region continued to have the highest proportion of Universal Credit households affected by the benefit cap, with 4.3 per cent capped in May compared with 3.3 per cent at February 2026.Scotland remained the region with the lowest proportion (1 per cent) of Universal Credit households capped in May this year.The monthly average amount that households were capped by stood at £346 in May. This compared with a monthly average of £237 in February and £255 in May 2025. Of the 160,000 households being capped in Universal Credit, 58,000 started on the benefit cap for the first time between March and May 2026In June, social security minister Stephen Timms defended the benefit cap as a way of encouraging benefit claimants into work.After the Government faced calls from a Labour MP in the House of Commons to consider axing the benefit cap, Sir Stephen said: 'Being in work is the best way to avoid poverty.'The benefit cap does give a modest but significant incentive to start work and then to progress in work.'Some people are not able to work, so the cap doesn't apply to people out of work on disability or caring benefits, but for others it remains in place.'