Some families to lose ?4,000 a year in 'unfair' tax credit changes, says Labour
Up to 200,000 low-income families will lose out from little-noticed change, says shadow chief secretary to the Treasury
Up to 200,000 families could lose ?4,000 a year because of a little-noticed change to the working tax credit coming into force in April, Rachel Reeves, the shadow chief secretary to the Treasury, will say in a speech on Saturday.
She will condemn the change, which will affect low-income families whose parents work between 16 and 24 hours a week, as a "deeply unfair change" that will penalise people unable to persuade their employer to let them work longer.
The change was originally announced in October 2010, but Labour believes that many people affected by the cut, which will save the Treasury ?500m a year, have not yet grasped its implications.
Currently people on a low income can get working tax credits if they have at least one child and they are working at least 16 hours a week. But from April 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 between them, for them to continue to qualify.
There are 212,000 families where parents work between 16 and 24 hours a week. They earn less than around ?17,000 a year. According to Labour, if they do not increase their hours, they will lose ?3,870 a year in tax credits.
"In this climate, very few people in part-time work will find be able to increase their hours by up to 50% at the moment," Reeves will tell members of Usdaw, the shopworkers union, in a speech at their conference. "And for a couple with children losing around ?4,000 a year, or ?75 a week, from this change could mean going out to work makes no sense."
The Treasury has not disputed Labour's figures, although it does not accept that the change has in any way been hidden. It was announced by George Osborne, the chancellor, as part of the spending review.
A Treasury spokesman said Labour's figures ignored some of the other government measures being introduced to help working families.
"The chancellor has confirmed that working age benefits will go up by 5.2% in April and the child element of the child tax credit will increase by inflation from April which could mean up to ?135 extra per child. We also know that families are worried about the cost of living and so we've cut fuel duty and frozen council tax. Families will also benefit from the increases in the personal tax allowance," the spokesman said.
The spokesman also stressed that the government had to save money. "Ultimately there is nothing fair about running huge budget deficits and burdening future generations with debts we cannot afford to pay," he said.
"If the deficit is not tackled now, the impact on families will be worse in the long term with less money to deliver the public services that they rely on
Some families to lose ?4,000 a year in 'unfair' tax credit changes, says Labour | Money | The Guardian
Up to 200,000 low-income families will lose out from little-noticed change, says shadow chief secretary to the Treasury
Up to 200,000 families could lose ?4,000 a year because of a little-noticed change to the working tax credit coming into force in April, Rachel Reeves, the shadow chief secretary to the Treasury, will say in a speech on Saturday.
She will condemn the change, which will affect low-income families whose parents work between 16 and 24 hours a week, as a "deeply unfair change" that will penalise people unable to persuade their employer to let them work longer.
The change was originally announced in October 2010, but Labour believes that many people affected by the cut, which will save the Treasury ?500m a year, have not yet grasped its implications.
Currently people on a low income can get working tax credits if they have at least one child and they are working at least 16 hours a week. But from April 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 between them, for them to continue to qualify.
There are 212,000 families where parents work between 16 and 24 hours a week. They earn less than around ?17,000 a year. According to Labour, if they do not increase their hours, they will lose ?3,870 a year in tax credits.
"In this climate, very few people in part-time work will find be able to increase their hours by up to 50% at the moment," Reeves will tell members of Usdaw, the shopworkers union, in a speech at their conference. "And for a couple with children losing around ?4,000 a year, or ?75 a week, from this change could mean going out to work makes no sense."
The Treasury has not disputed Labour's figures, although it does not accept that the change has in any way been hidden. It was announced by George Osborne, the chancellor, as part of the spending review.
A Treasury spokesman said Labour's figures ignored some of the other government measures being introduced to help working families.
"The chancellor has confirmed that working age benefits will go up by 5.2% in April and the child element of the child tax credit will increase by inflation from April which could mean up to ?135 extra per child. We also know that families are worried about the cost of living and so we've cut fuel duty and frozen council tax. Families will also benefit from the increases in the personal tax allowance," the spokesman said.
The spokesman also stressed that the government had to save money. "Ultimately there is nothing fair about running huge budget deficits and burdening future generations with debts we cannot afford to pay," he said.
"If the deficit is not tackled now, the impact on families will be worse in the long term with less money to deliver the public services that they rely on
Some families to lose ?4,000 a year in 'unfair' tax credit changes, says Labour | Money | The Guardian
screw you nag3 
Comment