Belfast Telegraph

Monday 28 July 2014

Families '£891 per year worse off'

Work and Pensions Secretary Iain Duncan Smith has said his reforms will not reduce the UK's benefits bill

Coalition tax and benefit changes have left families £891 a year worse off on average, Labour said as it stepped up attacks on a raft of welfare reforms.

The Opposition said Institute for Fiscal Studies figures showed a £9.93 boost from this year's Budget was far outweighed by a £901 annual hit from previous measures.

A raft of welfare reforms and tax changes come into force this month amid a chorus of complaints from campaigners about the impact on poor families and the disabled.

Among them is the controversial cut in housing benefit for social housing tenants deemed to have spare rooms - dubbed a "bedroom tax" by critics.

Shadow chancellor Ed Balls said the hit on families was "shocking" - pointing out that the start of the financial year would also see the top rate of income tax cut to 45p.

"These shocking figures show the huge hit millions of families are facing at the very same time David Cameron and George Osborne are giving millionaires an average £100,000 tax cut," he said.

"On average families will be £891 worse off this year because of changes introduced since 2010. All this comes at a time when a flatlining economy has seen prices rise faster than wages and unemployment rise again this month.

"And while ministers trumpet the small rise in the income tax personal allowance, they should admit that it is hugely outweighed by things like cuts to tax credits and child benefit, higher VAT, the bedroom tax and the granny tax. They are giving with one hand, but taking away much more with the other."

The Government says ending what it calls a "spare room subsidy" will free up unused space needed by people on waiting lists and save taxpayers £500 million a year.

But the National Housing Federation says a national "one size fits all" approach will fail to solve overcrowding and could in fact increase the welfare bill. Around 660,000 people face losing an average £14 a week from Monday. On the same day council tax benefit is also being replaced by a new system run by local authorities but with 10% less funding.

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