Universal Credit change could give families extra £3,650 a year after major rule change

A major change to Universal Credit rules could leave larger families thousands of pounds better off after Labour abolished the controversial two-child limit on benefit payments.The rule change came into force on April 6 and means families can now receive the Universal Credit child element for every child in their household, regardless of how many children they have.Previously, parents claiming Universal Credit were generally restricted to receiving the child element for only their first two children if additional children were born after April 2017.The change was first announced in the 2025 Budget before becoming law earlier this year. TRENDING Stories Videos Your Say Families with three or more children could now receive around £3,650 a year extra for each additional child.That equates to roughly £304 more every month for households that were previously affected by the restriction.Labour estimates suggest around 480,000 households could benefit from the change during the 2026/27 financial year.The reform affects working households as well as those who are unemployed.According to Labour figures, around 60 per cent of families impacted by the previous two-child limit had at least one parent in work.The change only applies to the child element within Universal Credit and does not affect Child Benefit payments, which remain separate.For existing Universal Credit claimants, the Department for Work and Pensions (DWP) is expected to have automatically updated awards during May or June depending on each claimant’s assessment period.Families who have not yet seen an increase in their payments are being advised to contact the DWP.LATEST DEVELOPMENTSOver 120,000 Britons have spent their entire adult lives on Universal Credit, damning report findsDWP hits millions of Universal Credit claimants with deductionsDWP urged to keep 'pubic trust' as YOUR bank account could be probed in benefit fraudClaimants can raise concerns through their Universal Credit online journal or contact the Universal Credit helpline on 0800 328 5644.Households expecting an increase but still receiving previous payment levels are being encouraged to check their claims directly with the department.The changes may also mean some families who were previously ineligible for Universal Credit could now qualify for support.Additional child elements increase a household’s maximum Universal Credit entitlement, potentially bringing more families within eligibility thresholds.Online benefits calculators including GOV.UK and Turn2Us can help households check whether they may now qualify for support.Some families affected by the overall benefit cap may not receive the full additional amount available under the new rules.However, households that include someone who is disabled or seriously ill are exempt from the benefit cap and will continue receiving their full entitlement.A spokesman for financial assistance experts Vettory said: Many families may not realise this change already applies to them and money they are entitled to could simply be going unclaimed. Our Standards: The GB News Editorial Charter