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Children's Society urges benefits freeze plans to be reconsidered

Published 23/02/2016

MPs prepared to debate Iain Duncan Smith's Welfare Reform and Work Bill
MPs prepared to debate Iain Duncan Smith's Welfare Reform and Work Bill

A children's charity urged ministers to reconsider plans for a four-year freeze on a range of benefits and agree a moratorium on future welfare cuts for low-income families.

The charity made the call after its research suggested that the plans risk pushing more children into poverty.

More than 7.5 million children live in four million low-income families who will by 2020 lose up to 12% of the real value of benefits including Child Tax Credits, Working Tax Credits and Jobseeker's Allowance , found the Children's Society.

And the charity said it was "shocking" that almost two-thirds of those affected - 4.9 million children living in 2.6 million families - live in working households who receive benefits to top up low pay.

The society's research looked at the overall impact of a range of changes to benefits, tax credits, income tax liabilities and earnings announced over recent years, some of which have yet to be implemented.

Although reforms such as the new £7.20-an-hour National Living Wage and the planned £12,500 threshold for income tax will benefit low-paid workers, any gains will be offset by cuts in support, the research found.

Young parents and families with disabled children claiming Universal Credit for the first time are particularly likely to lose out, said the charity.

Children's Society chief executive Matthew Reed said: "Families on low incomes are facing a barrage of cuts. If ministers are genuinely concerned about child poverty they must reconsider plans to freeze benefits over the next four years.

"At the very least, the Government needs to guarantee there will be no further cuts when the Chancellor delivers his Budget next month.

"Austerity has hit families hard, including those in work. Further cuts to support would push more children into poverty and undermine incentives for families to move into work or earn more."

According to the Children's Society, the combined impact of welfare changes by 2020 will mean that, for people making new claims:

:: A 23-year-old primary school teacher and single mother-of-two renting their home could be worse off by £239 per month;

:: A nurse and her partner with three children, renting in London, could be worse off by £425 per month;

:: An army corporal and his partner with three children, including one who is disabled, who own their home, could be worse off by £771 per month.

The research was released as MPs prepared to debate Work and Pensions Secretary Iain Duncan Smith's Welfare Reform and Work Bill.

A spokesman for Mr Duncan Smith's Department for Work and Pensions said: " Our welfare reforms are crucial to delivering a higher-wage, lower-tax, lower-welfare economy and thus ensuring that the most vulnerable are always supported and that work always pays for those that can work.

"We are bringing welfare spending under control, while - crucially - helping people into work and, through Universal Credit, helping them to earn more.

"More people than ever before are now in work, wages are rising above inflation, and the National Living Wage is set to boost pay even further."

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