Monday, October 14, 2019

Benefit freeze to stay for working people costing typical family £300 a year

Powered by Guardian.co.ukThis article titled “Benefit freeze to stay for working people costing typical family £300 a year” was written by Rowena Mason Deputy political editor, for theguardian.com on Monday 27th November 2017 19.24 UTC

Millions of people will have their benefits frozen for another 12 months from April in a move that will cost a typical working family with two children about £300 a year.

Caroline Dinenage, a work and pensions minister, confirmed that the benefit freeze for working age people will remain in place, while the state pension and some other benefits will increase by the rate of inflation at 3%.

The freeze, which has been in place since 2015, means a real-terms cut in income for millions of people because of rising living costs.

Before the budget, the Resolution Foundation thinktank calculated that a typical working family with two children would lose £315 a year as a result of the policy, while the Institute for Fiscal Studies found benefit entitlements would be lower by an average of £450 per year for 10.5m households affected by 2020.

Those on the minimum wage in receipt of benefits will see at least part of the cut offset by a higher wage rate of £7.83 per hour from April.

But the freeze will still bite for millions of people in a move that saves the Treasury about £1.9bn next year.

Philip Hammond had been facing calls to scrap the four-year benefit freeze promised by George Osborne in 2015 but he did not overturn the policy at last week’s autumn budget.

The freeze – affecting benefits including tax credits, child benefit, jobseeker’s allowance, part of employment and support allowance and universal credit – was then confirmed in a written statement to parliament on Monday morning at a time when media attention was focused on the announcement of the royal engagement.

Debbie Abrahams, Labour’s shadow work and pensions secretary, said it showed the prime minister has “failed to make good on her promise to help those struggling to get by, at a time when Britain is facing an unprecedented two lost decades of earnings growth”.

“By continuing to freeze working-age benefits when inflation is soaring, the government is subjecting 10.5 million households to an average cut of £450 a year,” she said.

“The government should end the freeze on social security to support those with the least in our society and lift people out of poverty.”

Stephen Lloyd, the Liberal Democrats work and pensions spokesman, added: “The Tories seem to be shamelessly using the royal engagement to bury bad news. Millions of hard-pressed families are set to be pushed over the edge into poverty by these cruel cuts.”

Charities and thinktanks have been warning that the impact of the cut will be severe for many households.

The Joseph Rowntree foundation has predicted the freeze is set to drive almost half a million more people into poverty by 2020.

After the budget, Torsten Bell, director of Resolution Foundation, said the chancellor had “made the wrong call to press ahead with a damaging freeze on benefits” as the outlook for family finances is worsening.

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