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Friday 21st December 2012 | 12:31
USDAW press release
Usdaw, the shopworkers' union, slammed the Benefits Uprating Bill published today and shows how the 1% cap on increases to tax credits and child benefit will cost families with two children over £1,000 in the next three years.
With the Office of Budget Responsibility predicting that inflation will continue to rise by between 2% and 3% over the next three years, the 1% cap on tax credits and benefit increases will make a massive difference to families on low to middle incomes, especially those with children who will lose the most.
Usdaw's calculations show that by 2015-16, a family with one child will have lost £784, those with two children will lose £1,091 and families with three children a massive £1,398 as their tax credits and child benefit fail to increase with the cost of living.
Families on low and middle incomes have already lost out from previous freezes for three years to Child Benefit and Working Tax Credit.
On Tuesday the Treasury admitted that a lone parent or a couple with one parent working full-time on the minimum wage would receive £660 less in Working Tax Credit from April 2013 than they would have done if tax credits had continued to rise in line with RPI (note 3) and that a family with two children will have received over £500 less in Child Benefit by April 2014 due to the freeze (note 4).
John Hannett, Usdaw General Secretary, is very concerned at the impact the changes will have on union members and working people throughout the country,
"Working people on low and middle incomes have already borne a disproportionate cost from the Government's cuts.
"The freeze on Working Tax Credit and on Child Benefit has already substantially cut the incomes of working people at a time when the cost of basic necessities like food and fuel has been rising so sharply.
"Many of our members are reporting that they struggle to afford to feed their families and heat their homes." That cannot be right for people who are already working as many hours as they can.
"The further cuts announced today in the Benefits Uprating Bill are a kick in the teeth for working people that will fill many households with despair. Our members cannot understand how this Government can give a tax cut to millionaires at the same time as cutting the support that working people rely on to keep them above the breadline."
Paul, an Usdaw member from Kent who lives with his partner and two children aged four and two, works on the night shift in a warehouse to support his family, said:
"My pay isn't brilliant; It just about covers our outgoings and like most families at the minute, we need our tax credits to get us through week to week. My partner and I are really worried about the changes and that we will not be able to afford to live.
"My family and families like mine are urging the Government not to crucify working families.
"Right now, it is a big enough struggle. If these plans to cut tax credits over the next couple of years go ahead, then I worry that I will be forced into joining the queue at my local job centre because I would be better off."