Steep repercussions on mums following tax credits reform

Chancellor George Osborne’s reform of the tax credits allowance will have steep repercussions on working mums, reveals our new survey.

Chancellor George Osborne’s reform of the tax credits allowance will have steep repercussions on working mums, reveals our new survey.

What’s in the pipeline?
Tax credits were one of the many issues to be hit when the austerity measures were announced in the recent comprehensive spending review.  Changes in the way tax credits are to be calculated will see a reduction in the percentage of childcare costs which parents can claim through the childcare element of the Working Tax Credit (WTC) from 80% to 70% in April 2011.  This move is designed to save the Government £385m a year by 2014-15. 
Changes in the eligibility rules will ensure 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.  It is estimated this will save the Government a further £390m a year by 2014-15.
But the biggest saving for the Government will see £625m remain in the Treasure coffers as a result of the freezing of basic and 30-hour elements of WTC for three years.

How much will this affect working mums?
Our survey revealed the changes to tax credits will have far-reaching effects on most families.  Only one third (32%) who took part in our poll said they would not be affected by the new measures.
More than one fifth (22%) said they will have to stop working or at least reduce their hours to take account of the changes to their family income, because they would no longer qualify for the same level of childcare remuneration.
Another fifth (21%) told our survey they will be forced to increase their hours to make up the new shortfall in tax credits.  One mum told us anonymously: ”I find this so unfair.  I have worked for the same employer for the past nine years as I decided I didn’t want to be a stay at home mum, but I find that most of the mums in the playground seem to have a better life than me.” She explained she worked 20-25 hours a week but had now been told she’d been paid too much in tax credits ”leaving me not a lot of choice but to increase my working hours even more which I really do not want”.
And another fifth (22%) said they would now be forced to rely more on relatives and friends for more informal childcare, pushing the burden further on to grandparents.  A survey carried out by Workingmums.co.uk recently found 44% of working mothers rely on grandparents to look after their children.
Bernice Gaze told our poll: ”I agree things are getting harder for ordinary people to be better off working than on benefits.  It is disgusting…I work and get tax credits and housing benefit and council tax benefit, I still find it hard to make ends meet, and as for holidays, forget it.”

Emotional repercussions
Sue Beever, author of Happy Kids Happy You, said: ”It’s shocking to see that 65% of families will have their work life balance adversely affected by these changes. It seems to fly in the face of government rhetoric regarding the importance of parental input in children’s early years.  I’m also dismayed to see benefits such as tax credits and child benefit being reduced as these are the only ways that government financially values the contribution parents make to society.
Increased stress in family life will inevitably impact on the quality of time and input that parents are able to spend with their children. “We” time will be replaced by “wii” time – or worse – as parents have less capacity to pay attention to their children’s needs.”





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