Parents of children under five reportedly could be exempt from the two-child benefit cap.
Ministers are considering options for alleviating the impact of the two-child limit for universal credit or child tax credit.
Options under consideration include applying the limit only to those with children who are five and over, exempting parents of disabled children and parents in work, and increasing child benefit payments for parents of young children, according to The Guardian.
An analysis by the Resolution Foundation shows the existing plans to reduce the welfare bill by £3bn would contribute to a rise in overall child poverty from 31% to 33% by 2030.
It estimates that this would raise the number of children living below the poverty line to an all-time high of 4.6 million.
