Impact of Government changes to in-work benefits


Joseph Rowntree Foundation has released a report looking at the medium-term impact of the Government’s changes to in-work benefits and suggests they will outweigh the potential gains from the initial rise in the minimum wage to £7.20-an-hour. The report states that only 6% of low-income families – essentially those with two parents working full-time on the minimum wage – are expected to see a boost in living standards from the higher rate.

The report assessed the overall influence of the Chancellor’s July Budget on a range of low-income households from now until 2020. It concluded that many people, especially those on pensions, families with two parents working full-time and single people without children will end up better off; however, millions of other low-income households face years of struggle as vital tax credits are removed. 

It also found single parents with one child who work full-time on the minimum wage will be £80-a-week short of what they need for a basic standard of living in 2020. Two-parent families where one parent works full-time and the other part-time will face a similar gap in their budgets. Those looking for jobs would be the worst affected; a family with two out-of-work parents and two children will have a £221-a-week shortfall on what is needed.

Turn2us can help

Turn2us CEO Simon Hopkins said: “This report further highlights the fact that many of the poorest and most vulnerable families will be impacted as a result of the cuts proposed in the Welfare Reform Bill. This makes it doubly important that people understand all the help that they’re eligible for and that such help is well-publicised. Turn2us is here to help those who are struggling financially - I would urge anyone worried about their situation to use our Benefits Calculator and Grants Search to make sure they are getting all the funds they are entitled to.”

You can download the full Summer Budget Living Standards report from the Joseph Roundtree Foundation’s website (PDF file size 12.32kb).

Published 7 September 2015