Mums forced to quit work due to tax credit cuts

Almost a quarter of mums have been forced to stop working because of changes to tax credits, according to a survey for

mum who works at home


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.”

One said: “I would love to work, but can’t afford childcare for my two children and I don’t have any family near to help me out. I’m not lazy or wanting to ‘scrounge’ from the government, but I really cannot afford to work.”

Gillian Nissim, founder of, 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.”

Comments [4]

  • Dee says:

    I have always provided my circumstances including bank statements and wage slips pretty much on demand each time. There has been no change.. But recently my credits have been slashed beyond affordability. I have appealed. That takes time. I have a balanced my job with caring for my severely disabled daughter and am now forced to hand in notice to the nursery as I can’t guarantee it will be assessed quick enough to save my job..HMRC should be ashamed.

  • Anonymous says:

    I'm a single parent and have had my childcare element stopped altogether due to an error made by an admin worker's input. I have not been able to put my wee one to nursery since June and tax credit has still not written back!! I am thinking of handing my notice in at work and I have worked for 25 years since leaving school.

    Editor: Have you rung the tax credit helpline? You can ring them on 0345 300 3900 and try to get some idea of how long this could take. Don't do anything hasty. If it was an error then you should get the money back. Are you able to explain your situation to your employer and work out some compromise if you are struggling with childcare temporarily? Presumably you cannot take unpaid Time off for dependants, but you are entitled to do so for breakdowns in childcare arrangements.

  • Anonymous says:

    I am in work just now, but as of yesterday I have lost £62 a week working tax. I just don’t know what I am going to do. My partner looks after the 2 kids and I work. I now need 8 more hours and my work is a small company and can’t afford to pay me more so I will have to now stop working. I don’t know what the government are thinking about. I will be adding to the unemployment figures.

  • Anonymous says:

    I was a self employed (building my business up over 7years) and a single parent for a few years. I have now been married to my husband for 3 years. When I was on my own with my daughter, living in rented accommodation (not a choice that was mine – I went through hell and back) family tax credit enabled me to remain self-employed until an opportunity came up for employment. I have worked extremely hard all of my working life. Myself and my husband still are on a low income and we don’t have holidays abroad – but working family tax credit has absolutely saved me/us over the years. I am striving to be able to earn enough income so that we are not to be dependant on this benefit, but in the mean time it’s an absolute necessity. I work for the Government, but urge the Government to carefully consider the impact on many people’s lives who do strive and work very hard. I have a huge admiration for single parents as it’s the hardest job I’ve ever done, especially those who are working!

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