The Labour Party will make real terms cuts to child benefit in the first two years of its term in government if it is elected after the 2015 General Election.
The shadow chancellor Ed Balls, who is speaking at the Labour Party's annual conference in Manchester, is expected to say that child benefit would only rise by 1% for the first two years of a Labour government under his plans.
The move means child benefit hikes would be less than the most recent rates of Consumer Price Index (1.5%) and Retail Price Index (2.45%) inflation.
But Balls is expected to say that the "tough decision" will save taxpayers £400m ($653m, €508m) over five years.
"I want to see child benefit rising again in line with inflation in the next parliament," Balls is expected to say.
"But we will not spend money we cannot afford. So for the first two years of the next parliament we will cap the rise in child benefit at 1%."
"It will save £400m in the next parliament. And all the savings will go towards reducing the deficit."
The proposal comes after the Coalition Government froze child benefit from 2010 to 2014.
Currently, one parent can receive £20.30 a week for an eldest child and £13.40 a week for each of their other children up to 16 and, in some cases, until they are 20 years old.
But Balls is also expected to say that he will slash ministers' pay by 5%.
The move would mean that ministers' salaries would drop by £6,728 from £134,565 to £127,837.
The news comes after the Labour Party leader Ed Miliband announced that he would raise the National Minimum Wage to £8 per hour by 2020 if he is elected next year.