Thousands of Neath families with children will lose an average of £511 a year because of changes to tax, benefits and tax credits introduced on 6th April. Neath MP Peter Hain has criticised the government for making cuts to those on the lowest income whilst at the same time giving tax breaks to the richest one percent.
The new figures from the Institute for Fiscal Studies follows last month’s Budget and is on top of tax rises already introduced, including last year’s VAT rise which is costing a family with children an average of £450 per year.
New government figures obtained by Labour also show that up to 1485 families in the Neath constituency are set to lose their Child Tax Credit or Working Tax Credit. In Neath 1300 families on modest and middle incomes will lose all of their Child Tax Credit – worth around £545 per year and up to 185 working couples earning less than around £17,000 per year will lose all of their Working Tax Credit – worth up to £3,870 per year – if they cannot increase their working hours.
Mr Hain said, “It is the same old Tories, out of touch with the difficulties facing ordinary people struggling to make ends meet. Why is it that thousands of families and pensioners pay more so millionaires can pay less? Cameron’s economic policies are not working and they are squeezing the budgets of hard working Neath families to get the figures to add up.”
Figures also uncovered by Labour reveal that, following the changes to working tax credit, a couple with two children on the minimum wage will be better off quitting their jobs if they cannot work at least 19 hours per week.
The IFS figures also show that government policies mean pensioners will be an average of £315 a year worse off from April 2014 once cuts to their allowances announced in last month’s Budget – what has been dubbed the ‘granny tax’ – have kicked in.