Measures include a rise from 2,500 to 25,000 in disregarding increases in parental income from one tax year to the next.
The charity, which has been campaigning for reform of the tax credit system, said this would 'hugely reduce the scope for overpayments'.
Head of policy Paul Dornan said, 'We hope that the new system will make life easier for claimants, reduce the scope for errors and restore confidence in tax credits.'
But he added, 'We urge the Revenue to stop automatically clawing back overpayments and give claimants a breathing space in which they can challenge the recovery. The Revenue should also introduce a right of appeal.'
However, the charity warned that the Chancellor must do 'much more' in next year's spending review towards helping 3.5 million children in the UK living in poverty if he is to meet the Government target of halving child poverty by 2010.
Meanwhile, research into child poverty by Save the Children published last week found that Government policy was making 'little or no improvement in the percentage of children in severe poverty in England, Scotland and Wales'.
Britain's Poorest Children Revisted is an update by researchers at Loughborough University of the charity's 2003 report. It analysed data from the most recent British Household Panel Survey, from 1994 to 2002.
The charity said the Government needed to adopt a strategy which included measuring 'severe poverty'.
Save the Children chief executive Jasmine Whitbread said, 'The reality is one in ten children are experiencing severe poverty - that means going without a winter coat, a pair of shoes or a hot meal and with little hope of doing well at school. Until the Government measures severe poverty it cannot target its policies to those most in need.'
The report is available at www.savethechildren.org.uk/britainspoorestchildren.
