Over 200 local couples with children could lose in the region of £4,000 a year from this April, following a change to tax credit rules being introduced by the Tory-Lib Dem UK Government.
Katy Clark, Labour MP for North Ayrshire & Arran, revealed the shocking figure this week and urged the Conservative-led government to reconsider what she described as “a little-noticed change to tax credit rules that mean thousands of families will lose all of their working tax credits unless they can significantly increase their working hours.”
The change means couples with children, earning less than £17,700, will have to increase the number of hours they work from a minimum of 16 to 24 per week or they will lose all of their working tax credit of £3,870 a year.
UK Government figures contained in answers to parliamentary questions showed 220 households in North Ayrshire and Arran - 212,000 households across the country - could lose out. In addition, a recent survey by the Chartered Institute for Personnel and Development found that, as a result of the current economic downturn, one-in-five organisations have cut back on the number of hours offered to part-time staff, with only 6 per cent recording an increase.
Katy Clark said, “This is a deeply unfair change from a government that is increasingly out of touch with parents who are feeling the squeeze and struggling to juggle work and family life.
“Raising taxes and cutting spending has seen unemployment rise and the economy go into reverse, with many employers cutting people’s hours. In this climate, very few people in part-time work will be able to increase their hours by up to 50 per cent at the moment. For a couple with children, losing around £4,000 a year - or £75.00 a week - could mean that going out to work no longer makes sense.”
Ms Clark said the proposed change tells us “everything you need to know about David Cameron and George Osborne, that while the banks are getting a tax cut this year, they are making life harder for parents who are working and trying to do the right thing.”
Warning the potential tax bombshell was just a few weeks away, Katy Clark said, “For many families here in North Ayrshire and Arran, it means going out to work won’t pay and they’ll be better off on benefits. That makes no economic sense at all. The government urgently needs to think again.”