Socialist Worker

Tax Credit: benefit change will hit the working poor

by Dave Sewell
Issue No. 2293

The Tories want to rob around 212,000 families of almost £4,000 a year by changing the rules on Working Tax Credit.

Currently people are eligible to claim this benefit if one parent works at least 16 hours a week. But from April this threshold will be raised to 24 hours.

Treasury minister Chloe Smith has said that the policy is “what we have to do as a country to get out of the enormous deficit”. The Treasury thinks the change will claw back £6 billion.

Wages

Meanwhile the Tories argue that people are claiming more in benefits than some workers take home in wages.

But the vast majority of benefit claimants are in work. They suffer from low pay and increasing costs of living. This makes it impossible for many people to live off their wages alone.

Many of those working part time are desperate for more work. TUC research says that 1.3 million part time workers are seeking full time jobs.

The Usdaw union for shop workers says 78 percent of its members can’t get the extra hours they seek.

It is these people who the new changes will punish. The change will affect over 800,000 people—including over 400,000 children.

Poverty

Many of these people will be plunged into poverty. Even parents who are full time carers for their disabled children will not be exempt.

A family with two children, one unemployed adult and one adult working part time gets around £18,000 a year in wages and benefits.

This is already close to the poverty line. Losing £3,870 in working tax credit will mean a cut of over 20 percent of their income.

Under the previous Labour government, the benefits system subsidised bosses who paid low wages. Employers could cut wages while the state picked up the bill.

Now the Tories want to take away the benefits without raising wages to compensate.

In effect they are taking money from children to punish adults for not taking jobs that aren’t even there.


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