Government cuts to tax credits next April will leave nearly 91,100 low to middle-income working families across Northern Ireland – and their 175,400 children – significantly worse off, according to new research published by UNISON.
Using official figures published by HM Revenue & Customs (HMRC) UNISON has calculated that across the UK more than 2.7m working families – or two in five of all working families with dependent children – could lose as much as £3,000 a year next April.
This is equivalent to the entire population of Greater Manchester, where the Conservative party conference got under way yesterday.
And in working households across the UK, where the parents are in receipt of tax credits, there are 5.2m children – equivalent to the entire population of Scotland. In Northern Ireland, there are 175,400 children whose parents will be penalised by the changes to tax credits.
In his July Budget, the Chancellor announced changes to the tax credit taper and threshold, a move that will see £4.4bn a year taken out of the pockets of low to middle income families across the UK. In some cases people stand to lose more than 10% of their take home pay.
According to the UNISON research, London has the highest number of working families (357,000) who will be hit by the tax credit changes, closely followed by the West Midlands (269,000), and Yorkshire and the Humber (255,000).
Unsurprisingly, says UNISON, the most deprived parts of the country have the largest number of families affected by George Osborne’s proposals, while in more affluent places there are far fewer families who stand to lose out.
The worst affected areas in Northern Ireland are the Upper Bann (6,800 families affected), West Belfast (6,200 families affected) and Newry and Armagh (6,200 families affected).
Commenting on the research, UNISON general secretary Dave Prentis said: “Many of the thousands of families in Northern Ireland who will be the victims of the Chancellor’s cruel tax credits snatch and grab still have no idea that they are going to lose out next year.
“When they start receiving letters in the post from HMRC just before Christmas, it will mean chaos for family finances.
“Tax credits are a lifeline for families In Northern Ireland – quite simply they are the difference between them keeping their heads above water and going under.
“The huge loss of income – of between £1,000 – £3,000 a year – will have a devastating impact upon family budgets that have yet to recover from the living standards crisis. Parents, who will go without in a vain attempt to make sure their children don’t, will be forced deeper into debt.
“The government is full of praise for people who go out to work to try and provide better lives for their children. Yet these are the very people these punitive changes will hurt. It’s time for the Chancellor to admit that he’s got this one very wrong, and back down before it’s too late.”
Next April the point at which tax credits start to be reduced (the threshold) will be cut from £6,420 to £3,850, and the rate at which they will be reduced (the taper) will be increased from 41p for every £1 earned above the threshold to 48p.
A family with one child earning £20,000 a year could lose £2,000 and a family with two disabled children on £32,000 a year as much as £3,000.
According to the Office for National Statistics, there are 7m working families with dependent children. So with 2.7m in receipt of tax credits, this means that 39 per cent, or two in every five working families with dependent children, will be hit by the changes.
With many UNISON members – for example, teaching assistants, hospital cleaners, home care workers, healthcare assistants, nurses, PCSOs and street cleaners – set to be affected by the changes, the union has developed an online calculator so people can work out how the tax credit changes are likely to affect them and their families.
UNISON has also produced a map showing the numbers of families that will be affected across the UK. By clicking on each constituency, people can see whether their local MP voted for or against the cuts to tax credits. UNISON is urging people whose MP voted for the cuts to write to them explaining why the changes will be so damaging.
