Tax credit raid will increase child poverty and discourage work

In response to the announcement in today’s Autumn Statement that most elements of working tax credit will be frozen next year, and that the planned above inflation increase in child tax credit of £110 in 2012-2013 will no longer go ahead, Gingerbread warned that the move would increase child poverty and undermine work incentives.

Fiona Weir, Chief Executive of Gingerbread, said:
 
“The families who will be hit by the raid on tax credits are those that are determined to work despite low wages and high childcare costs – exactly those people the Chancellor says are ‘doing the right thing’.
 
“Single parents are twice as likely to receive Working Tax Credit as couples with children, and for many work would not be an option without the support it provides.
 
“The government has also tucked away in Treasury documents the fact that previous commitments to make an above inflation increase of £110 in child tax credit in 2012 will no longer go ahead (1). This was explicitly intended to prevent further increases in child poverty rates, which must now be inevitable”.
 
“The result of these decisions will be more children in poverty, and more single parents who can’t afford to work. It’s an ill-advised move for a Chancellor who says he doesn’t want to increase child poverty and pledges to make work pay.”
 
36% of all single parents are WTC claimants, compared to just 15% of couples with children, meaning that single parents are twice as likely to be in the WTC group as couples with children (2).

 
ENDS
 
Gingerbread spokespeople are available. For more information please contact Gary Dunion, Media Officer, on 0207 428 5416, 07881 951 138 or gary.dunion@gingerbread.org.uk.
 
 
Notes to Editors
1.    The government announced an additional £60 in child tax credit in 2012-13 in the June 2010 Emergency Budget, and a further £50 in the October 2010 Comprehensive Spending Review, amounting to £110 in total.

2. Child and Working Tax Credit Statistics Finalised Annual Awards 2008-09, HMRC, 2010

Gingerbread is the charity which works nationally and locally, for and with single parent families, to improve their lives. We achieve change by championing their voices and needs and providing support services. www.gingerbread.org.uk