Changes to Universal Credit payments are being made by the Department for Work and Pensions (DWP), giving families with children more financial assistance. The adjustments, which provide much-needed respite in the face of rising living expenses, include modified childcare and support rates for children with disabilities.
Effective from April 2025, these updates reflect the government’s commitment to align benefits with inflation, ensuring essential assistance reaches the most vulnerable households.
Higher Payments for Children Under Universal Credit
The DWP’s update introduces a 1.7% increase to the child-related components of Universal Credit, marking the first adjustment in over a year. For families, this means higher monthly allowances for children born before or after April 2017. For instance, payments for a first child born before April 6, 2017, will increase from £333.33 to £339 per month. Subsequent children or those born after April 6, 2017, will see payments rise from £287.92 to £292.81.
For households with disabled children, the financial boost is more pronounced. The higher disability rate, applicable to children receiving enhanced care under Disability Living Allowance (DLA) or Personal Independence Payment (PIP), will increase from £487.58 to £495.87 monthly. The lower rate for disabled children will also rise modestly, from £156.11 to £158.76 per month.
These changes come as statistics reveal that over 2.8 million Universal Credit households have children, with around 66,000 supporting five or more dependents. However, the two-child limit—restricting additional payments to two children for claims made after April 2017—remains a contentious issue. Advocacy groups like the Child Poverty Action Group argue that this policy excludes 1.6 million children from much-needed support.
Additional Help With Childcare Costs
In addition to adjustments for children, the DWP has increased childcare-related support under Universal Credit. Families with one child can now claim 85% of childcare costs up to a cap of £1,031.88, compared to the previous limit of £1,014.63. For households with two or more children, the maximum support rises from £1,739.37 to £1,768.94. Here is a summary of all the changes incoming :
| Category | Previous Rate | New Rate (From April 2025) |
|---|---|---|
| Child Payments | ||
| First child (born before April 6, 2017) | £333.33/month | £339/month |
| First child (born on/after April 6, 2017) or subsequent children (with exceptions) | £287.92/month | £292.81/month |
| Disabled Child Additions | ||
| Higher rate | £487.58/month | £495.87/month |
| Lower rate | £156.11/month | £158.76/month |
| Childcare Costs | ||
| One child (85% of costs) | Up to £1,014.63/month | Up to £1,031.88/month |
| Two or more children (85% of costs) | Up to £1,739.37/month | Up to £1,768.94/month |
This measure aims to ease the financial strain on working parents, particularly as childcare costs across the UK remain among the highest in Europe. The adjustments, effective April 7, 2025, will be reflected in payments issued after May 13, due to Universal Credit’s arrears-based system.
The Labour Party has pledged to address systemic issues such as the two-child cap, forming a Child Poverty Taskforce to develop long-term solutions. Their goal is to reduce the estimated 10,000 children pushed into poverty annually by restrictive benefit policies.
