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Social security cuts affect more working families than non working families

Social security cuts to affect working families more than non working families
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During the current Parliament, the Government has announced a wealth of measures aimed at cutting the annual welfare bill. The main focus of these has been to encourage more people into work and show that employment actually pays more than living on benefits. However, analysis conducted by the Trade Union Congress (TUC) has found that the main impact of these cuts will fall on working families, particularly those with children.

Benefit cuts for working families

The report released by the TUC highlights that the recent cuts to social security will hit working families the hardest. The full impact of the benefit cuts will see this group loose twice as much as those families where no one works. They analysed how all the changes that have been announced to benefits throughout the current Parliament would affect different sections of the country. By 2016/17, the annual reduction to the main benefits bill will total £30.5 billion.

The Government has found support for these cuts by focussing on the fact that they are meant to make it pay to work. The TUC shows that the main impact will actually be felt by those who are in work. The analysis predicts that those with children are set to suffer the biggest loses. Nearly 50% of the cuts target benefits that are claimed by working parents.

By 2016/17, working families will lose a total of £17.9 billion each year in benefits. Whereas families who are claiming out of work benefits will only lose £6.2 billion annually. The group who will be affected the most are working parents, who will see an annual reduction of £11.7 billion in the amount of benefits they claim. Families with children, but who are out of work, will have their benefits decreased by £2.3 billion.

Social security cuts to affect working families more than non working families

What working benefits are affected?

When we get to the 2016/17 financial year, we will see £13.8 billion of cuts to the amount of tax credits that are paid out. More than 90% of claimants of this benefit are working families. Further, more than 90% of the reductions to child benefit will affect working parents.

The introduction of Universal Credit, which is slowly being rolled out across the country, will have an additional impact on working parents. The aim of this new benefit is to make it simpler for people to claim and reduce the total amount that families are entitled to, as part of the benefit cap. Once this has been fully implemented, it will reduce the benefits bill by an additional £5 billion.

The main reason behind these substantial cuts to benefits has been the change in the way annual increases are calculated. The Government announced in 2010 that they would no longer be using the Retail Price Index (RPI) to calculate how much benefits should rise by on an annual basis. Instead they now use the Consumer Price Index (CPI), which generally results in a lower level of inflation.

The impact of these cuts will be felt by working families for a long period of time. Research by the Chartered Institute for Housing found that out of the 10 million people who are affected by benefits changes, five million of them are currently working. Plans by the current Government if they were re-elected is to freeze any increases in benefits aimed at those of working age for two years.

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About Catherine Stern

About Catherine Stern

Catherine Stern is a freelance writer with a background in marketing and PR. She currently writes web content on a range of subjects, from finance and business to travel and home improvements. As a working single mum of two young boys she understands the pressures that today’s working parents face and the topics they want to read about.

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