Cuts that have come into force at the start of the new tax year could force a further 200,000 children into poverty.
The “pernicious” move, which limits Universal Credit to the first two children in a family, will leave some families £2,780 a year worse off, the Child Poverty Action Group said.
And it hit out at the exemption process for women who have a child as a result of rape, saying the form was a “grave breach of claimants’ privacy”.
CPAG and the Institute for Public Policy Research estimate that 850,000 working families with more than two children will be affected. Two thirds of these will be families with three children.
Families that can comfortably support a third child today could struggle tomorrow
It warned the cut, which applies to new claims only, will harm children in larger families – a group which is already at greater risk of slipping into poverty.
Chief executive Alison Garnham said: “This is a particularly pernicious cut because it suggests some children matter more than others. It’s also illogical because no parent has a crystal ball.
“Families that can comfortably support a third child today could struggle tomorrow and have to claim universal credit because, sadly, health, jobs and relationships can fail.
In total, more than 92,000 people have sold The Big Issue since 1991 to help themselves work their way out of poverty – more than could fit into Wembley Stadium.
“Our analysis shows another 200,000 children will be in poverty once Universal Credit is fully rolled out, directly because of this cut. Surely children should not have their life chances damaged because of the number of siblings they have.”
The Women’s Equality Party said it was appalled by the “stealth imposition” of the new rules, saying it didn’t require parliamentary approval.
This is unenforceable, ill-thought-through, and very wrong
Party leader Sophie Walker said: “These draconian cuts will damage thousands of children’s life chances. For a child to be poor just because they live in a bigger family is an injustice.
“The government is punishing families with more than two children, knowing full well that this will affect the poorest families first.”
And on the so-called ‘rape clause’ Walker said: “This is unenforceable, ill-thought-through, and very wrong. That a rape survivor should be put through this ordeal in order to avoid potential poverty is unthinkable.”