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Budget to leave 13 million families worse off


The working age benefit changes announced in yesterday’s Budget will negatively effect 13 million families in the UK, according to the Institute of Fiscal Studies (IFS).

Thirteen million families will lose on average £260 a year, and Tax credit changes mean that three million families will loose an average of £1,000. Even when the new “living wage” is taken into account, people on tax credits would still be “significantly worse off”.

The Resolution Foundation, a think tank that campaigns for lower and middle income families, has also called the government on the cuts, releasing a report which shows that the changes to tax credits could “weaken the incentive both to enter work, and earn more."

Its calculations show that even when the National Living Wage is introduced, a low-earning single parent with one child, working 20 hours a week at £9.35 an hour, will be £1,000 a year worse off. As well as this, a low earning couple with two children will be worse off by £850 a year and some families moving to Universal Credit or applying for tax credits after April 2017 could face much bigger losses of up to £3,450 a year.

Gavin Kelly, chief executive of the Resolution Foundation said:

"We shouldn't think that a higher minimum wage will compensate all low income working families for their losses - many working households will be left significantly worse off."

Chancellor of the Exchequer, George Osborne, defended his emergency Budget, telling the BBC:
"This is a fair deal - because you've got to have a welfare system that's fair to the people who pay for it, as well as the people who need it.”

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