Thousands lose £73 a week in working tax credit change, says research

Charities say benefits changes leave families with less money

Thousands of low income households in Wales are £73 per week worse off following changes to working tax credits, according to research into official figures.

BBC Wales' Dragon's Eye programme found an estimated 9,010 families, including 17,115 children, will lose nearly £4,000 a year.

The Treasury pointed to an increase in the income people can earn tax-free.

It said "tough decisions" had been taken "in the fairest way possible".

From April couples earning less than £18,000 had to increase their working hours from a minimum of 16 hours a week to 24 hours to avoid losing working tax credits of £3,870.

Although a minority of these have been able to find extra hours, charities and the UK government's political opponents say many have seen their working tax credit terminated and all entitlement lost.

'Fanciful'

Shadow Welsh secretary Owen Smith said: "The prospect that it's easy to pick up an extra eight hours work in order to continue for it to be worth your while going out to work is fanciful.

"And that fundamental stumbling block should have been recognised by the government."

Ministers should have realised that the changes would "damage" families and "further diminish trust in the welfare system", he said.

Child Poverty Action Group chief executive Alison Garnham said: "This is an absolute calamity that plunges nearly 20,000 children deep below the poverty line.

"Many of these parents will now have less money in work than if they just claimed benefits."

Adrian Curtis, the director of the Trussell Trust Food Banks in Wales, said 42% of people turning to the organisation for support did so because of changes or delays to benefits.

"Our recent study found that 15% said if they hadn't received food from the food bank they would have committed a crime," he said.

Elika Helps, of Rhondda Taff Citizen's Advice Bureau, said the changes were a disincentive for some people to seek work.

Some people had "found that they're not going to be working enough hours and are not going to be able to claim the credits any longer, there isn't going to be that financial support for them so they're making the decision that, actually they can't afford to go back into work".

"Because on a cash basis, it's clear they would be worse off in work than on benefits at the moment."

A Treasury spokesman said: "The government's actions mean that from the beginning of the tax year in April, 24 million households are £6.50 a week better off.

"Millions have been taken out of tax altogether by raising the personal allowance, putting up to £126 cash back in people's pockets. The basic state pension is also going up by its largest ever cash sum and there are increases in most other benefits.

"We've had to take tough decisions, such as on tax credits but have done so in the fairest way possible, meaning more than 15 times as many people gain rather than lose from the recent changes."