Newspaper article The Journal (Newcastle, England)

Welfare Cuts Set to Hit the Poorest Families Hardest; FAMILIES

Newspaper article The Journal (Newcastle, England)

Welfare Cuts Set to Hit the Poorest Families Hardest; FAMILIES

Article excerpt


FAMILIES and young people are among those who will see the biggest changes to their finances following the budget.

The Chancellor unveiled a raft of proposals under his One Nation vision that the Conservatives believe was a budget for 'working people.'.

Welfare policy changes will go some way towards the Government's PS12bn welfare cut that it has promised to make over the next three years. Mr Osborne had initially pledged to make the cutbacks in 24 months.

The Government will abolish the automatic entitlement for housing benefit for 18 to 21-year-olds.

There will be a freeze on workingage benefits for four years, including tax credits and local housing allowance, although maternity pay will be excluded.

The benefits cap will be reduced from PS26,000 to PS23,000 in London and to PS20,000 elsewhere.

Higher earners living in housing association or council accomodation will be asked to pay market rent.

However the most significant reform is child tax credits, which will be paid only for the first two children in a famiy from April 2017. Critics say this would punish large low-wage families.

The Chancellor said: "These changes to tax credits are not easy but they are fair, and they return tax credit spending to the level it was in 2007-08 in real terms."

He also said that no new births and new claims would be eligible for the first child premium in Universal Credit, and that they will remove the 'family premium' from Housing Benefit for children born or claims made after April 2016 - but that this would result in no cash loss.

He said: "When we came to office in 2010 this country had reached the point where a benefit that was intended to support lower income households, was instead available to nine out of 10 families in this country.

"Now, our properly focused reformed Tax Credit system will provide support to five out of 10 families - a much more sustainable balance in our welfare system. …

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