A new analysis shows that families with parents working just one day per week could earn the equivalent of £140,000 per year thanks to new Labour plans.
Rachel Reeves has announced the lifting the cap on child benefits (Image: Getty)
A new analysis has revealed the amount people who only work one day per week could earn through benefits under a new Labour rule. The UK’s two-child benefit cap is being scrapped in April 2026, an announcement that came as part of Rachel Reeves’ Autumn Budget. The limit meant that people could only claim child benefit payments for their first two children born, but Labour has decided to scrap it.
The calculations were done by the Daily Mail and suggest that parents who work as little as one day per week could earn the same as someone on a £140,000 per year salary. The publication’s analysis suggests that a couple with three young children earning £10,152 between them could now increase their combined earnings by nearly £76,000. This would effectively give them £86,000, which is the equivalent take-home pay of a person earning a salary of £140,000 per year.
According to the calculations by the publication, a person earning £140,000 per year takes home around £86,000 after Income Tax and National Insurance.
At the same time, a family with three children on £10,000 per year between them can claim £26,000 for housing, £31,000 for childcare, £11,000 in child entitlement and a standard allowance of £8,000. While an earnings taper would knock £3,000 off that, it is gained back through the child benefit. This brings the family’s annual earnings up to £86,000, the take-home pay of someone on £140,000.
Shadow Work and Pensions Secretary Helen Whately told the Daily Mail: “Thanks to Rachel Reeves‘ Budget for Benefits Street, the system rewards those who do less and claim more.
“Under Labour, people on modest pay can top up their income with tens of thousands in benefits – the equivalent of a six-figure salary.
“Our welfare system only works if it’s fair to people who’re paying in. You don’t need a degree in ethics to see this is unfair. The welfare system is broken, and only the Conservatives, with our proposed £23billion in savings, have the backbone to fix it and get Britain working again.”
Conservative leader Kemi Badenoch previously blasted Labour’s decision to lift the child benefit cap. She said: “No wonder people are angry.
“People on benefits will get paid an extra £3,500 for every child they have because Labour is lifting the two-child benefit cap.”
The Tories have pledged to reverse the move if they regain power in the next general election. Lifting the two-child benefit cap will cost the taxpayer a reported £3.2 billion a year.
