DWP benefit rule change from April 6 to give some families 3,650 a year

The rule change is due to take place in April

Significant benefit rule changes outlined in the Universal Credit Bill are set to come into force from April 6, 2026 as part of the Government’s strategy to combat child poverty. This single change could see more than 400,000 families increasing their entitlement by thousands of pounds annually.

The two-child limit will be removed at the beginning of the new tax year. This means families receiving Universal Credit will be able to claim the child element of the benefit for every child in their household, rather than just the first two.

Furthermore, the benefit will also see a 3.8% rise as part of the annual benefit uprating in April. This will bring the child element to approximately £3,650 per year from when the two-child limit is removed.

It’s projected that 450,000 fewer children will be living in relative poverty by 2030/2031 as a consequence of this rule change. The Government also predicts that 150,000 fewer working age adults would be in relative poverty.

The child element of Universal Credit provides an additional sum to a family’s claim to help meet the costs of raising a child and tackle child poverty. These amounts are typically paid per child, but households with a third or more children born after April 2017 did not receive any additional support for these children.

There were certain exceptions for families that had a third or more children without choosing to, such as having a multiple birth or non-consensual conception. The two-child limit was initially implemented following the 2015 general election with the aim of making savings in the welfare system.

It’s estimated that in April of the previous year, approximately 483,000 families were impacted by the two-child limit. Government statistics also suggest that 300,000 children are living in relative poverty due to this policy.

It’s important to distinguish that the two-child limit is not the same as the benefit cap, which will not be lifted this coming April. The benefit cap restricts the maximum amount a working-age household can receive in benefits and varies depending on your location and living situation.

Roughly 50,000 families may not benefit from the removal of the two-child limit due to the benefit cap, and an additional 10,000 may not receive their full new entitlement as this would exceed their allocated cap.

Several other modifications to the Universal Credit system will also come into effect from April. This includes a reduction to the Limited Capability for Work-related Activities group, also known as the health element of Universal Credit.

At present, eligible claimants receive £94 per week from this component, but moving forward, applicants who make their first successful claim after April will only receive £50 per week.

Furthermore, whilst the majority of benefits, including Universal Credit supplements, will see a rise of 3.8%, the standard rate of benefits will receive an additional boost of 2.3%. This equates to a total increase of 6.2% solely for the standard rate.