Families face cuts in tax credit ‘bombshell’

Reporter: Erin Heywood
Date published: 16 February 2012

HUNDREDS of Oldham families could lose out on £4,000-a-year through Government changes to working tax credit rules.

Oldham East and Saddleworth MP Debbie Abrahams claims 650 families — with 1,560 children — will be affected.

She described the demands, which require families to work more hours before they can receive their benefit, as “out of touch” and “deeply unfair”.

Tax credit rules now state that couples with children who earn less than £17,700 a year must increase the number of hours they work per week from 16 to 24, or they will lose the benefit. The rules come into force on April 6.

But Labour MP Mrs Abrahams insisted the requirements are too extreme, after recent reports show that only 6 per cent of businesses across the country have increased the number of hours people work since the economic downturn began.

And with one in five businesses instead reducing the number of hours their staff work, Mrs Abrahams has voiced concerns that the effects could be damaging to the local area.

She said: “This is a deeply unfair change from a Government that is increasingly out of touch with parents feeling the squeeze and struggling to juggle work and family life.

“Raising taxes and cutting spending too far and too fast has seen unemployment rise and the economy go into reverse, and many employers are cutting people’s hours. In this climate, very few people in part-time work in and around Oldham will be able to increase their hours.

“It tells you everything you need to know about David Cameron and George Osborne, that while the banks are getting a tax cut, they are continuing to make life harder for parents in the squeezed middle who are working and trying to do the right thing.

“This tax credit bombshell is now just a few weeks away. For many families here in Oldham it means going out to work won’t pay and they’ll be better off on benefits.”

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