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Research Reveals Devastating Impact Of Tax Credits Cuts

As Peers debate tax credits cuts in the House of Lords, damning new research reveals the devastating extent workers in different jobs will lose out to the changes.

New analysis by the Child Poverty Action Group (CPAG) has calculated the expected losses by workers in various different jobs.

Nursery nurses, security guards, bank clerks and hospital porters are among those set to face huge cuts to their income next year, the research shows.

The Government’s proposed $4.4bn in cuts lower the threshold at which tax credits start to be reduced, increase the rate at which tax credits are removed and limit Child Benefit to two children for new applicants.

The analysis shows that nursery nurses will see their income slashed by £1.788 next year, as a result of the cuts. A security guard would lose £2,304; a dental nurse would lose £2,027; a bank clerk would lose £2,262; a hospital porter would lose £2,049; a school secretary £2,125; a care worker £1,906; a teaching assistant £1,896 a cook ; £1,860 and a hairdresser £1,669.

Lost income for families in 2016/17 compared with 2015/16 due to proposed changes to tax credits. Source: CPAG.
Lost income for families in 2016/17 compared with 2015/16 due to proposed changes to tax credits. Source: CPAG.

CPAG says proposed tax credits cuts would damage work incentives and increase child poverty. Adding that the so-called National Living Wage, rising income tax threshold or free childcare offer will not compensate families affected by the changes.

Child Poverty Action Group Chief Executive Alison Garnham said: “Nobody who supports hard-working families can think it’s right to suck £1,788 from the tax credits of a nursery nurse’s annual income, or £2,304 from a security guard, £1,669 from a hairdresser.

“These are grafting parents, often working long hours and trying to provide for their kids. And if you’re struggling now to pay for food, utilities, fares and your children’s clothing, these kind of losses must make you fear for the future.

“The Government has had the message loud and clear from right across the political spectrum: there isn’t a case for cuts that would target working families, increase child poverty and damage family security.”

Meanwhile, research by the welfare reform group Policy in Practice warns that two-thirds of working tax credit recipients will be left worse off.

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