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More than one million working single parents will
be among four million people to lose out from the unintended
consequences of two Government schemes aimed at supporting
low-income working families, unless action is taken.
This is the warning from the single parent
charity Gingerbread, following research into the impact of
Universal Credit on working single
parents once the new benefit is introduced in 2013.
The lowest earning families and individuals
stand to lose out on the equivalent of two-thirds of the intended
increase to their untaxed earnings when Universal Credit and the
Personal Tax Allowance interact for the
first time in 2013.
For every £1,000 increase in the Personal Tax Allowance, working
people in receipt of Universal Credit will take home the equivalent
of just £70, compared with £200 for those not reliant on government
In three successive budgets the government has increased
spending on the Personal Tax Allowance, aimed at helping lower and
middle income earners, with the next increase due in April 2013.
From October 2013 the welfare system will be overhauled with the
introduction of Universal Credit replacing most government
financial support, including Working Tax
Credit. However, the consequences of these two schemes working
together have not been revealed until now.
Gingerbread warns that the majority of the UK’s 1.1 million
working single parents, who are disproportionately likely to be in
lower paid jobs and therefore reliant on in-work financial support,
will be among those to lose out in the ‘unintended consequences’ of
these two Government policies interacting.
Fiona Weir, Chief Executive of Gingerbread, said:
“Unless remedial action is taken, those who lose out will be
hard working people whose wages still don’t bring in enough to pay
for their family’s day-to-day essentials, including the majority of
working single parents. We find it hard to believe that the
Government would design two schemes to support people into work and
lift their families out of poverty and yet have one effectively
cancel out two-thirds of the other, but as things stand, the
Treasury will be giving with one hand and taking with the
There are a number of cost-neutral steps that the
government could take to remedy this situation, Gingerbread
the Gingerbread briefing about Universal Credit, Personal Tax
Allowances and single parents (link opens in a new
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