Today’s Budget: what it means for families with disabled children
2 mins read
Wednesday 26 November 2025
In today’s budget the Chancellor, Rachel Reeves, has announced that the two-child limit will be scrapped altogether from April 2026.
The two-child limit currently means that many low-income families on Universal Credit only receive payments for their eldest two children, and not for a third or subsequent child born after April 2017. It has been one main drivers of child poverty among larger families. Its scrapping will come as a huge relief to many larger families with disabled children.
Anna Bird, Chief Executive of disability charity Contact, said:
“The scrapping of the two-child limit is welcome and an important step in the government’s Child Poverty Strategy. Research shows that disabled children are more likely to live in bigger households and 20% of households affected by the two-child limit have a disabled child. Many of the families we support have significant extra costs, running expensive electrical care equipment such as hoists or oxygen concentrators or paying for vital therapies.”
However, Contact is concerned that some families on Universal Credit may not gain financially. This is due to the risk that the higher child payments they get for a third or subsequent child could be deducted from their transitional protection payments.
Anna Bird added: “The government needs to urgently clarify whether there will be any special rules to ensure that families’ additional child payments from April 2026, won’t lead to the erosion of any transitional protection they receive. We will be seeking reassurances on this matter.”
Other budget announcements
Other benefits announcements in the budget that could impact families with disabled children include:
- Reforms to the tax breaks provided to those using the Motability Scheme. These are likely to lead to increase costs for those leasing a Motability car.
- Additional funding for the Youth Guarantee, a scheme to ensure all young people have access to education, training or employment placements.
- Increasing the numbers of people who will have face to face assessments for health-related benefits.
Contact’s Family Finance team are looking at the detail of the budget and will share more tomorrow.
