Lords' briefing on tax credit statutory instrument

Post date: 
26 October 2015

This briefing explains the impact of the government's plans to cut tax credits on working families and child poverty. CPAG is opposed to cuts to tax credits because they will damage work incentives and increase child poverty:

  1. They will hit working families hard. 3.2 million low-paid workers will lose an average of £1,350 next year.
  2. They will mean work pays less. Some low-income families will keep just 3p in every extra £1 they earn following the changes.
  3. Child poverty will increase as £4.4 billion will be taken from low-paid families.
  4. The cuts are not compensated by other changes such as the National Living Wage, rising income tax threshold or free childcare offer.
  5. The impacts have not been thoroughly assessed.