Another option which has been floated to relax the cap is increasing the two-child benefit cap to three children, which the think tank said could reduce child poverty by 320,000 by the next general election at a cost of £3.2bn per year.
It comes days after Sir Keir Starmer was urged by Labour MPs to scrap the two-child benefit cap entirely, with a key economic think tank warning that child poverty would otherwise hit a record high under Labour.
Speaking to The Independent this week, former shadow chancellor John McDonnell, who has sat as an independent MP since having the whip suspended by Labour in a rebellion over the two-child limit, said: “No Labour government in history has stood by and allowed child poverty to increase on its watch.
The Resolution Foundation warned that, under current spending plans, child poverty could rise to 33 per cent by the end of the decade, equating to 4.6 million children living in poverty.
The government is also considering exempting parents of disabled children, parents in work and hiking child benefit payments for those with young children, The Guardian reported.
