RACHEL Reeves is set to lift the two-child benefit cap in the Autumn Budget, according to reports.
The Chancellor is reportedly looking to replace the cap with a "taper" system, according to The Guardian and The Sun.
Charities, campaigners and many within the Labour Party have long called for the policy to be scrapped, criticising it for dragging children into poverty.
And, the SNP successfully moved a member's bill aiming to scrap the cap through the first stage of voting in the House of Commons, after Labour MPs abstained.
It comes as Prime Minister Keir Starmer failed to mention the two-child cap during his keynote speech at the Labour Party conference on Tuesday.
Both Starmer and Reeves had said they expect to respond to recommendations of the child poverty taskforce at the Budget in November.
The National previously told how Labour are reportedly delaying the release of a major investigation into child poverty "for political reasons", because it is expected to say that lifting the two-child cap would be one of the most effective ways to lift hundreds of thousands of children out of poverty.
Officials are understood to be wary of the escalating costs for large families.
The Treasury is exploring whether the cap could be limited to three or four children, or whether a "taper rate" could be introduced, which would mean parents get the most for their first child and less for subsequent children.
Another option reportedly being considered is lifting the cap only for working parents on universal credit, in order to encourage more people into the workforce.
According to UK Government figures, the two-child cap affected 1.7 million children in England, Wales, and Scotland last year.
Campaigners argue that 109 children across the UK are pulled into poverty by the policy every day.
North of the Border, the Scottish Government has pledged to effectively eliminate the two-child benefit cap in March next year.
While media reports have suggested Reeves will lift the cap, she refused to confirm if this is the case at a fringe event at the Labour Party conference on Tuesday evening.
Asked about the reports, she said: “Keir said in his speech today that we will reduce child poverty in this Parliament, but we will set out the policies in the Budget.
“I think we’ve been pretty clear this week that we can’t commit to policies without us explaining where the money is coming from.”
Adding that there were “real financial constraints” due to persistent inflation, tariffs, global conflicts and increased borrowing costs – along with expected changes to OBR forecasts – she said: “I would be the first person to want to find some money down the back of the sofa to pay for lots of different things.
“But I have to be Chancellor in the world as it is, not in the world as I might like it to be.”
Responding to reports Reeves is set to lift the two-child cap, Jen Clark, economic, cultural and social rights lead at Amnesty International UK said: “The UK’s benefit system is consciously cruel and the two-child benefit cap is one of its grimmest aspects, playing a core role in driving over 4.5 million children into poverty.
"It should be removed in its entirety as part of a wider overhaul of our social security system so that everyone is provided for, and no one is forced to choose between heating and eating for themselves or their families.”
The SNP criticised Starmer after it had been claimed he would announce the Government lifting the cap during his party conference speech on Tuesday.
However, the Prime Minister did not do so.
