UK tax credit ‘bombshell’ hits families

In a speech to shop workers’ union Usdaw, Rachel Reeves, the shadow chief secretary to the Treasury condemned a “little-noticed change to tax credit rules” for affecting low-income families whose parents work between 16 and 24 hours a week, and regarded it as a “deeply unfair change” to those unable to increase their working hours.

“In this climate, very few people in part-time work will find be able to increase their hours by up to 50 per cent,” she said. “This tax credit bombshell is now just a few weeks away. For thousands of families it means going out to work won’t pay and they’ll be better off on benefits. That makes no economic sense at all. The government urgently needs to think again.”

Working tax credit is a payment for low-income people earning less than £12,900 per year or a couple working at least 16 hours a week and earning less than £17,700 a year.

But the rules for couples will change, and one partner will have to work 24 hours a week or both partners will have to work a total of 24 hours in order to be qualified for working tax credit

Official figures obtained by Labour’s Treasury spokeswoman Cathy Jamieson, show that 212,000 households, where parents work between 16 and 24 hours a week, could lose their entitlement of the £3,870-a-year credit by implementing the planned changes.

Sarah Jackson, director of Working Families charity, also said the move was “cruel at a time when the jobs and extra hours just aren’t there”.

However, insisting that the British government has to save money, a Treasury spokesman slammed Labour’s figures for ignoring some other measures being introduced by the government to help working families.

SSM/MF/HE

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