More than seven million children living in low income families risk being pushed further into poverty over the next four years as a result of the benefits freeze this April, according to new research by the Children’s Society.
The charity’s briefing, 'The Future of Family Incomes: How key tax and welfare changes will affect families to 2020', is warning that the freeze will hit just over 4 million low income families across the UK. The research estimates that 4.9 million children living in 2.6 million working households will be affected by the changes.
The freeze on Child Tax Credits, Working Tax Credits and Jobseekers Allowance rather than raising them in line with living costs could see affected families losing up to 12% from the real value of their benefits and tax credits.
The freeze forms part of the Welfare Reform and Work Bill which was debated in Parliament on Tuesday 23 February.
Ahead of next month’s Budget, the charity is urging the government to reconsider its plan to freeze benefits and agree to halt further cuts in support for low income families.
While some changes, such as the introduction of a higher minimum wage, might increase household incomes by 2020, others will cancel out any gains by significantly cutting key support for many families, the research found.
The research claims that planned changes threaten to make life harder for struggling families. Aside from the benefits freeze, this includes limiting Child Tax Credits to a family’s first 2 children and scrapping the family element of Child Tax Credit.
Impact highlighted in the report
A 23 year-old primary school teacher and single mum of two children renting their home could be worse off by £239 per month or £2,868 per year
A nurse and her partner with three children, renting in London, could be worse off by £425 per month or £5,100 per year
An army corporal and his partner with three children, including one who is disabled, who own their own home, could be worse off by £771 per month, or £9,252 per year.
Government must reconsider plans to freeze benefits
Matthew Reed, Chief Executive of The Children’s Society, said: Families on low incomes are facing a barrage of cuts. If ministers are genuinely concerned about child poverty, they must reconsider plans to freeze benefits over the next four years. At the very least, the Government needs to guarantee there will be no further cuts when the Chancellor delivers his Budget next month.
“Austerity has hit families hard, including those in work. Further cuts to support would push more children into poverty and undermine incentives for families to move into work or earn more.”
‘Crucial to delivering higher wage, lower tax, lower welfare economy’
A Spokesman for the Department of Work and Pensions said: “Our welfare reforms are crucial to delivering a higher wage, lower tax, lower welfare economy and thus ensuring that the most vulnerable are always supported and that work always pays for those that can work.
“More people than ever before are now in work, wages are rising above inflation, and the National Living Wage is set to boost pay even further.”
If you are struggling financially, you can use our Benefits Calculator to check your entitlement to benefits and our Grants Search to see if you are eligible for help from a charitable fund, based on your personal circumstances and needs.
The Your Situation section on our website contains information resources on benefits and grants and a Find an Adviser tool to help you find face-to-face advice in your local area.
If you are bringing up a child, there may be benefits, grants or other financial support available to you. The ‘Bringing up a child' section of our website has information about ways you might be able to get help.
Other sections on our website you may find useful are:
Source: The Children’s Society press release: Millions of Children face benefits freeze