Almost 1,000 children in Waverley are in families affected by a limit on child allowance benefits, estimates suggest.
The two-child limit restricts child allowances in universal credit and tax credits – worth £2,935 per year – to the first two children in a family unless the children were born before April 6, 2017 when the policy came into force.
The Child Poverty Action Group is calling for the policy – which it says pushes families into poverty – to be scrapped by the Government.
Department for Work and Pensions figures show that 290 households with three or more children in Waverley were receiving Universal Credit in April, and 260 received Child Tax Credits – 550 in total.
CPAG estimate that this means there are 869 children in families affected by the policy – among 1.2 million across Great Britain.
It says the two-child limit is one of the biggest drivers of rising child poverty, and its impact will intensify as living costs surge.
Alison Garnham, chief executive of the charity, said the first instalment of the £650 cost-of-living emergency payment is not enough to stop the policy pushing families deeper into poverty.
She added: "The two child-limit is piling on the pain for affected families.
"One in 12 children are taking the consequences of this brutal policy – their health, development and well-being are being jeopardised.
"If every child matters – not just some – the policy must be abolished."
The DWP figures reveal that the policy affects 360,000 families nationwide – 59% of which are working households.
CPAG estimates that around one in 34 children in Waverley are impacted by the cut-off – though this is the lowest rate.
Kate Andersen from the Benefit Changes and Larger Families project said the two-child limit causes "serious and significant harms" to all affected young people.
She said: "While parents do all they can to stop children from being impacted by the two-child limit, the policy makes it almost impossible for affected families to meet basic needs.
"The policy creates social and emotion harms, and can increase tensions within the household.
"We know that these harms are likely to have long-term negative consequences for children's physical health, social, behavioural and emotional development, cognitive development and school achievement."
The DWP said over 8 million households on benefits will receive the first instalment of the £650 Cost of Living payment, with millions getting at least £1,200 in extra support.
A spokesman said: “This policy means families on benefits are asked to make the same financial decisions as families supporting themselves solely through work, including considering our comprehensive childcare offer for working parents and child benefit for all children."