A significant legislative step forward is being taken today as the Department for Work and Pensions (DWP) progresses a bill to overhaul Universal Credit rules. The Universal Credit (Removal of Two Child Limit) Bill has reached its Committee Stage in Parliament on Monday, February 9, 2026, marking a pivotal moment in social welfare policy.
Key Provisions and Timeline
The core objective of this bill is to eliminate the controversial 'two-child limit,' a policy that currently restricts additional financial support for children in Universal Credit households to only the first two offspring, with some specific exceptions. If passed, this change is scheduled to take effect from April 2026.
From that date, the 'child element' of Universal Credit, which is valued at approximately £3,650 annually for the 2026/27 financial year, would become available for every child in a household, regardless of birth order. This represents a substantial shift from the existing framework.
Impact on Families and Government Finances
Official figures indicate that around 483,000 families across the United Kingdom were impacted by the two-child limit as of April 2025. The policy's removal carries significant fiscal implications. Government estimates suggest retaining the limit would have saved £2.4 billion in the 2026/27 period, with savings projected to rise to £3.2 billion by 2030/31.
The legislative process mandates that the Secretary of State must present an impact assessment to Parliament within six months of the Act's passage. This report will detail the effects of the removal on households and children nationwide.
Political Context and Rationale
The move to abolish the two-child limit was initially announced by Chancellor Rachel Reeves in the November 2025 Budget. In her statement, she framed child poverty as the most significant barrier to equal opportunity in society.
Reeves highlighted the multifaceted costs of poverty, borne not only by children and their families but also by local services, the broader welfare system, and society at large. She argued that poverty suffocates the potential of young people by severely limiting their life chances and opportunities from an early age.
Strategic Alignment with Child Poverty Goals
This legislative action is a central component of the government's child poverty strategy, titled Our Children, Our Future: Tackling Child Poverty. The strategy concluded that removing the two-child limit would be the single most cost-effective measure to reduce child poverty rates across the country.
It is positioned as the most impactful part of a broader plan that aims to achieve the largest reduction in child poverty by any government within a single parliamentary term.
Legislative Mechanics
The bill works by repealing the amendments introduced by the Welfare Reform and Work Act 2016 to Section 10 of the Welfare Reform Act 2012, along with related secondary legislation that originally established the two-child limit.
This technical change means that for all Universal Credit claims, both new applications and existing awards, the two-child restriction would cease to apply from the April 2026 implementation date, ensuring a uniform application of the new rules.
