The report, from the Work and Pensions Select Committee, called for an extra 10 per week per child to be given to the poorest families.
Services should be universal, it said, pointing out that nearly half of all children living in poverty live outside the 20 per cent most deprived wards.
Affordable childcare and more help for disabled parents, single parents and families from minority ethnic communities were also necessary, it said.
End Child Poverty director Jonathan Stearn said the committee had hit on the "key issues".
"We understand why the Government has concentrated on the most deprived wards, but sadly that means 46 per cent of poor children miss out," he said.
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