The Department for Work and Pensions (DWP) has implemented a significant rule change for Universal Credit that will leave parents better off. From April 6, 2026, the two-child benefit cap has been scrapped, meaning households can now receive the child element of Universal Credit for every child they are responsible for.
The child element is currently worth £333.33 a month for a first child born before April 6, 2017, or £287.92 a month for each additional child. According to Save the Children, third and subsequent children will now be entitled to receive £3,500 each per year. This change directly impacts nearly 1.7 million children who were affected by the two-child limit in 2025, representing at least one in nine children in the UK. Previously, these families were denied the Child Element of Universal Credit, valued at £3,450 per year per child, for third and subsequent children.
Impact on Child Poverty
Research by Professor Donald Hirsch in The Cost of Child Poverty 2023 report highlights that child poverty costs the UK economy approximately £39 billion per year through poor health, lower educational attainment, and reduced employment in later life. Save the Children welcomed the policy change, stating: "This policy change is real, meaningful progress. It is not the end of child poverty in the UK, but it is one of the most significant steps in a decade - and it shows that collective pressure from families, campaigners, researchers, and organisations like ours can shift policy in ways that change children's lives."
However, the charity noted that more work remains: "The Benefit Cap continues to limit support for the most vulnerable out-of-work families. We will keep pushing for every child to have what they need to thrive - because when children do well, everyone does better."
Family Stories
A mother of three shared her struggles with the Guardian newspaper ahead of the rule change. "The children have only been back at school two weeks and already I’m in debt for school dinners and for upcoming school trips," she said. "If my child is the only child that doesn’t go then that will have an effect on him. Every month I do our budget to the last penny."
