‘Single parents to lose £500 a year in tax credit cuts’ – claim

Tax credit cuts which start today will reduce the gains to work for single parents by an average £500 per year, according to research from single parents charity Gingerbread. 

Tax credit cuts which start today will reduce the gains to work for single parents by an average £500 per year, according to research from single parents charity Gingerbread. 

Its report, Working but losing, also highlights that single parents who pay for childcare will lose twice as much in percentage terms as those who don’t, as a result of significant reductions in childcare tax credits.  It comes as Labour claims today is a "black Wednesday" for families, with women and children losing most. 
 
Gingerbread Chief Executive Fiona Weir said: “Despite the Government’s drive to push more single parents back into work, the package of tax credit reforms implemented today will actually reduce the gains to work for all single parents. 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."

Gingerbread says there is a contradiction between the Government’s long-term commitment to making work pay through Universal Credit, and the short-term impact on single parents between now and its introduction in 2013.

Fiona Weir added: “David Cameron made a promise to single parents last year that he was on their side. As well as committing to long-term reform, he must keep this promise and ensure that working single parents don’t lose out between now and the introduction of Universal Credit."

The Treasury says there will be "some losers" as a result of the tax credit and benefit changes, but adds that the poorest 80% would on average be better off. It adds that if it had not made the cuts now the poor would have had to pay more later.

Labour disagrees, saying the poorest families will be hit hardest. Ed Balls, shadow chancellor, said it was "a black Wednesday" for families, particularly women and children. He cited figures showing the childcare cuts would cost families with two or more children up to £1,560 a year while the freezing of the basic and 30-hour element of the working tax credit would cost some families £391 a year. He said part-time workers would be hard hit.

Working Families released a report on use of its helpline last year and says parents raised concerns then about childcare costs. Chief Executive Sarah Jackson said: "We hope that the proposed Universal Credit will make life simpler for parents, but we remain concerned that many families will be financially worse off as the cuts to the childcare element of the Working Tax Credit take effect."

“This year’s report also focuses on some of the many successes of our helpline:  our legal advisers provide invaluable support to parents, informing them of their rights and guiding them through negotiations with employers.  In many cases our advice keeps parents in work”.

How will the tax credit and other legislative changes affect you?




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