Change to Working Tax Credits will NOT affect single parents

 

From April 2012, accessing Working Tax Credit at all will only be possible for a couple with children if they jointly work at least 24 hours, with one working at least 16 (currently, the requirement is simply that one partner works at least 16 hours). Working Families know from their helpline callers that people often struggle even to find the extra hours to bring them up to the current 16 hour a week requirement.

 

Finding another eight hours a week will not be easy for many families: they may request more hours but they are dependent on their employers’ ability and willingness to provide additional work. The change also makes no allowance for the reasons that some families work part-time, and/or have only one partner in work. This may be to do with having a disabled child, or simply the shortage of jobs which are compatible with childcare or with school hours.  In a two-earner family where one partner works more than 24 hours and the other less, the loss of the main earner’s job will be a double blow as both income and Working Tax Credit will be lost unless the second earner can increase their hours. The loss of Working Tax Credit for a family who are not able to find the additional eight hours a week is up to £73 a week. For some families this may tip the balance towards being better off out of work.

 

Poorest Working Families Cease to Qualify for Working Tax Credit of £3,870

 

In April 2012 the rules for Working Tax Credit for couples with children will change.

Currently, couples have to work at least 16 hours a week between both parents.

From April they will have to increase their working hours to at least 24 hours, or they will lose their whole entitlement to Working Tax Credit, worth £3,870 a year.

 

House of Commons figures show that 212,000 couples will be affected by the change – 424,000 adults.  These families include 470,000 children.

This is an average of 1,375 people in each constituency.

 

Most people working 16 – 24 hours on a low wage work in the service sector.  This sector has been very hard-hit by the recession and it cutting all possible costs.

 

In retail, where a high proportion of the affected families work, hours are being cut as much as possible and no extra hours are available.

Very high levels of unemployment mean there are no additional or alternative jobs.

 

Of several hundred Usdaw (Union of Shop, Distributive and Allied Workers) members affected by the changes, 78% said they would not be able to find the additional hours of work they needed.

 

A typical household with 2 children where a couple work between 16 and 24 hours a week has total income, including wages, tax credits, and benefits, of around £18,000 a year – they are already in or on the threshold of poverty.

 

Losing Working Tax Credit of £3,870 will mean these couples and their children will be plunged into absolute poverty, with total income around £14,000 - £15,000.

 

Families will struggle to afford basic essentials, enough food and heating.

They may well get into debt and homeowners may lose their homes as no support with mortgage interest will be available, as it would if they were out of work.

 

78% of Usdaw members said they would not be able to find extra working hours.

If 75% of all households affected are in the same position, 159,000 couples with over 350,000 children will be plunged into poverty.

 

When they lose £3,870 Working Tax Credit, families will hardly be any better off if they cease work altogether.

 

Couples who do not claim Housing Benefit will only receive around £16 a week extra by continuing in their job.  Those on Housing Benefit will receive just £13 a week more. These amounts are often little more than the cost of going to work which usually includes travel by public transport or car, work clothing and food.
 

Talk about it with us in our Benefit Changes and You Discussion pages