The recent government budget includes several announcements that may affect people in the TSC community. We thought it useful to give a run-down, now the dust has settled

Ending the two-child limit

Those claiming Universal Credit currently get a ‘child element’, which is an additional amount for each child. Due to the ‘two-child limit’, families have not received the ‘child element’ for the third or subsequent children after 6 April 2017. From April 2026, families will start to receive the child element for their third and subsequent children.

However, there are some concerns that families on Universal Credit with a ‘transitional element’ may have this deducted from the extra child payments, meaning they won’t see the benefit in the short term.

Universal Credit childcare support

Those who claim UC whilst working and paying for childcare costs could receive an additional ‘childcare element’ to cover some childcare costs. The government is also increasing the maximum amount of childcare costs that can be reimbursed when more than two children are in childcare.

Benefits and National Minimum Wage increase

Changes to most working-age benefits from April 2026 include:

  • Increase in line with September CPI inflation of 3.8%
  • The standard element of Universal Credit will be increased by 6%
  • National Minimum Wage will increase to £12.71 per hour. This should also lead to a rise in the Carer’s Allowance earnings limit

Disability assessments

Changes to disability assessments starting in April 2026 include:

  • Increasing the DWP’s capacity to carry out Work Capability Assessment (WCA) re-assessments
  • Increasing the amount of Personal Independence Payment (PIP) assessments and WCA carried out face-to-face
  • Decreasing the amount of PIP reassessments where there has been no change to a claimant’s ability

Motability Scheme

Changes to the Motability Scheme and equivalent schemes from July 2026 include:

  • Vehicles being subject to VAT on any top-up ‘advance payment’ for more expensive vehicles
  • Insurance Premium Tax applying to vehicles leased for the first time
  • More expensive car brands being removed from the scheme

This may make using the scheme more expensive. However, the changes won’t apply to vehicles designed or permanently adapted for wheelchair users.

Energy bills

From 2026, the government will remove green levies from energy bills, reducing bills by £150 per year.

Employment for young people

The government has committed extra funding to employment and skills support for young people, including a guaranteed six-month paid work placement for all eligible 18–21-year-olds claiming Universal Credit and looking for work for 18 months.