Universal Credit and Benefit Reforms Take Effect — Two-Child Limit Removed, Health Element Cut
From 6 April 2026, major changes to Universal Credit remove the two-child benefit limit for new children, increase standard allowances, but halve the health element for most new claimants. Legacy benefits officially ceased on 31 March 2026.
Three significant reforms to Universal Credit took effect on 6 April 2026, reshaping support for working-age households and those unable to work. Together, these changes affect almost all 6.6 million families receiving Universal Credit.
The Three Main Changes
Two-Child Limit Removed: Working Tax Credit, Child Tax Credit, and Housing Benefit for working-age claimants all ceased functioning after 31 March 2026, with eligible households receiving a two-week run-on payment to prevent sudden income gaps. Families with third and subsequent children born after 5 April 2017 now qualify for the full child element in Universal Credit, no longer subject to the two-child cap. This provides immediate income increases for larger families.
Standard Allowance Increase: The Universal Credit standard allowance increased from £316.98 to £338.58 per month for single people aged under 25, and from £400.14 to £424.90 for single people aged 25 and over; joint claimants aged 25+ now receive £666.97 (up from £628.10).
Health Element Halved for New Claimants: The UC health element is halved for most new claimants from £5,079 to £2,556 and frozen in cash terms until 2029–30, though existing claimants and those assessed as having severe conditions continue receiving the higher rate.
Key Dates & Entitlement
In January 2026, the DWP issued the final mandatory migration notices to legacy benefits claimants, requiring them to move to Universal Credit within the deadline provided or lose entitlement. From 2026, for every £1 earned above the work allowance (if applicable), UC payment reduces by 55 pence, meaning it is almost always worth working more hours.
For expat families and working residents: if you receive legacy benefits and missed the migration deadline, contact the DWP immediately. Universal Credit now consolidates six former benefits and includes support for rent, childcare (up to 85% of costs), disability, and caring responsibilities. Foreign nationals with settled status can claim; those without may have restrictions depending on their visa type. Check your eligibility at gov.uk or use a free calculator before applying.
Sources
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