Friday, 10 February 2012

Tax credit change could cost families £4k a year - Labour

About 470,000 children could be affected by the change, Labour says

Low income families with parents in part time work could lose nearly £4,000 per year because of a change in tax credits, the Labour Party says.
Parents can currently qualify for Working Tax Credit if they do at least 16 hours per week.
Up to 200,000 families could be hit from April when the threshold is raised to 24 hours per week, the official data highlighted by Labour shows.
The Treasury said new measures to help working families were being introduced.
The figures obtained by Labour's Treasury spokeswoman Cathy Jamieson show 212,000 households - with a total of 470,000 children between them - could lose the £3,870-a-year credit because of the change.
The region with the most households likely to be affected is said to be London (46,205), followed by the North West (26,845), West Midlands (22,675) and Yorkshire and the Humber (20,225).
BBC political correspondent Naomi Grimley reports that shadow ministers are suggesting it might be difficult for parents to increase the amount of time they work as many companies were cutting employees' hours because of the tough economic climate.
'Nothing fair'
In a speech to shopworkers' union Usdaw later, shadow chief secretary to the Treasury Rachel Reeves will describe the party's findings as a "tax credits bombshell".
But a spokesperson for the Treasury said Labour's figures ignored the other measures it had taken.
These include increasing working age benefits by 5.2% in April and the child element of Child Tax Credit by inflation.
The spokesperson added that fuel duty had been cut and council tax was frozen.
"When it is introduced, the Universal Credit will give nearly three million households a higher level of entitlement and enable more parents to get into work by helping 80,000 families with childcare support."
The spokesperson added: "Ultimately there is nothing fair about running huge budget deficits and burdening future generations with debts we cannot afford to pay."

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