Child Disability Living Allowance

October 2, 2026

This research note from Policy Exchange explores the rapid and concentrated growth of Child DLA and proposes efficient, targeted and appropriate reform. It recommends restricting eligibility criteria for learning difficulties, behavioural disorder and hyperkinetic syndrome, which now make up 86% of claimants, as well as returning average awards to pre-pandemic levels.

Child DLA currently costs the Exchequer £5.3 billion annually, 231% of pre-pandemic levels, and is forecast to rise to £8.3 billion by 2030/31. The total number of children receiving DLA has almost tripled in recent years, increasing from 314,000 in 2010 to 915,000 in 2026.

Since the pandemic, 404,000 additional Child DLA claimants have been associated with mental health and related conditions, equivalent to around one additional child in every classroom in England and Wales.

Awards are also becoming systematically more generous to mental health claimants, with more being awarded the highest rates and fewer being awarded the “nil rate”.

The report recommends reducing the explosive growth in claimant numbers and costs by:

Restricting eligibility criteria for the three fastest-growing mental health conditions and adjusting the rate distribution at each award level to return the average award per claim to pre-pandemic levels, saving £11.9 billion over four years.
Revising and updating criteria every three years thereafter, to ensure the distribution of awards and the average award size remain at sustainable levels.

Using two-thirds of the savings generated to reduce the deficit, while reinvesting the remaining third in proactive measures to support children and their families:

£1 billion more for Child and Adolescent Mental Health Services (CAMHS), nearly doubling the current annual budget.
£300 million in additional funding for family hubs, nearly tripling the current annual budget.
£200 million for parental support programmes.

This would still generate £3 billion in annual savings.

The launch of this report was covered by: