Families with children will lose an average of £511 a year from the changes to tax, benefits and tax credits that were introduced last week, according to new figures from the Institute for Fiscal Studies (IFS). The analysis follows last month's Budget and is on top of tax rises already introduced, like last year's VAT rise which is costing a family with children an average of £450 per year.
New government figures also show that up to 1,950 families in the Rother Valley are set to lose all of their Child Tax Credit or Working Tax Credit due to the changes introduced last week. 1,700 families on modest and middle incomes will lose all of their Child Tax Credit – worth around £545 per year. Up to 250 working couples earning less than around £17,000 per year will lose all of their Working Tax Credit, worth up to £3,870 per year, if they cannot increase their working hours.
Figures also reveal that, following last week’s changes to Working Tax Credit, a couple with two children on the minimum wage will be better off quitting their jobs if they cannot work at least 19 hours per week.
The IFS figures show that government policies mean pensioners will be an average of £315 a year worse off from April 2014 once cuts to their allowances announced in last month’s Budget, what has been dubbed the 'granny tax', have kicked in.
For all the Government’s talk about increasing the personal allowance, these independent figures show that while they may be giving with one hand they are taking much more away with the other hand.
There do need to be tough decisions on tax, spending and pay, but why are people earning over £150,000 soon to get a £3 billion tax cut at the same time as parents on middle and modest incomes are being clobbered?
It cannot be the right priority to make thousands of families and pensioners pay more so millionaires can pay less – over £40,000 less in the case of the 14,000 richest people in the country. It also cannot be right to leave working parents trying to do the right thing better off if they quit their jobs.