Mums forced to quit work due to tax credit cuts - survey
Almost a quarter of mums have been forced to stop working because of changes to tax credits, according to a survey for Workingmums.co.uk.
The survey of over 320 mums found 24% said they had stopped working as a result of changes to tax credits in the budget. Sixteen per cent had reduced their hours and 22% had increased their hours. Only 29% said the changes had not affected how they worked.
Late last year, the Government announced several changes to how tax credits are calculated. These came into effect in April and include:
- reducing the percentage of childcare costs that parents can claim through the childcare element of the Working Tax Credit (WTC) from 80 per cent to its previous 70 per cent level
- changing the eligibility rules so that couples with children must work 24 hours a week between them, with one partner working at least 16 hours a week in order to qualify for the WTC
- freezing the basic and 30 hour elements of the WTC for three years from 2011-12
increasing the child element above indexation by £30 in 2011-12 and £50 in 2012-13
- removing the baby element of tax credits.
One mum wrote: “I've had to quit work as I can't afford the childcare. I now have no disposable income.”
Another commented: “With rising fuel costs and losing all credits it meant I would of been working just to keep my little girl in childcare. It didn't make financial sense to have someone else looking after her and seeing no extra income every month.”
Gillian Nissim, founder of Workingmums.co.uk, said: These results show that for a sizable number of women tax credits mean the difference between working and not working. Recent surveys suggest childcare costs are only likely to increase. Losing experienced women from the workforce cannot be good for business or the economy. Flexible working can help with reducing childcare costs, allowing parents to share the care and, if they work from home, to reduce the time their child is in care by cutting out commuting hours. However, it is not enough just to enable flexible working. We need to positively promote new ways of working which work for the way we live now."
Single parents face particular difficulties over tax credit cuts.
One single mum said: “I was in a job I loved for many years, I then went through the pain of a divorce and an ex-husband who is being chased by the CSA. So I made the decision to take a career break to take care of my 2 young children. I'm not work shy and have worked since leaving school some 20+ years ago, it is now due to my circumstance I am unable to work. Childcare cost is a wage in itself and I found it a great struggle with the day to day living with no support from my ex. I hope to change things soon, if childcare could be cut to a reasonable level, especially during the school holiday periods when childcare goes up considerably. I just can't afford to work for now, and that does not make me feel good.”
Chief executive of single parent charity Gingerbread Fiona Weir said: “Single parents constantly tell us how vital help with childcare costs is in making work pay, and this new survey shows the stark impact that tax credit changes are already having on working mums. The government is sending out really mixed messages – at the same time as introducing a Welfare Reform Bill intended to make work pay, it is actually making it harder for single parents to do so by cutting help with childcare costs and reducing the financial gains to work.”