Are they related? If not, it's a little unusual that they're both having such similar symptoms, which makes me wonder if it's something like fleas...? I know you say it isn't though, but just wanted to say that regardless. If they *are* related, then it may be less unusual for them to possibly be experiencing the same allergies.
When/how did it start? And are you in a warm or cold climate right now? If in a warm climate, do check pollen.com for pollens in your area. If in a cold climate, then ugh, it could be dust or something which is a tough allergy, obvs.
First, you gotta go to the vet since they've broken skin which means it could easily be/turn into a staph infection (pyoderma). Vet needs to do a skin scraping to look for overgrowth of bacteria. If you and the vet both think allergies, then bc these symptoms are so severe and are clearly interfering w/ quality of life, you have to think about meds to try such OTC antihistamines, Temaril P, steroids, Atopica, or allergy testing. If these allergies are all year round, then you think Atopica and/or allergy testing. If just seasonal, then Temaril P, OTC (if they work, that is), or steroids.
What are you feeding and did you change foods before this started?
I am a little surprised they're not licking/chewing their paws...which brings me back to that flea/pest question.
Here's another thread on allergies:
http://www.yorkietalk.com/forums/die...tart-here.html
You also should get an appropriate shampoo (NOT oatmeal!) that will support their issues, and most Vet Derms will suggest bathing about every 3-4 days if symtpoms are exacerbated. Go to Amazon and look up Synergy Labs VF shampoos, get the medicated one (anti parasitic etc) or the itch relief version. They make good stuff, but you def need to follow the directions.
Oh, also - get them on fish oil such as Ark Naturals Royal Coat.