Monthly Archives: October 2012

Usdaw Timetable for Cuts to Working Family Budgets

Here’s a really useful table from USDAW timetabling the cuts which will impact on working family budgets from 2010-13. It’s a little out of date now, but still a useful guide.

Date Cut / Change + Gain – Loss Who’s Affected
July 2010 Child Trust Fund reduced & Top-ups at age 7 abolished – £200- £250 Babies born after 31/7/10 only get £50Children under 7 at 31/7/10 lose top-up
January 2011  VAT increased by 2.5% to 20% Average- £307 Average household will pay £307 moreAverage for those with children is £450
Child Trust Fund abolished – £250 Babies born after 1/1/11 have no Child Trust Fund
Education Maintenance Allowance abolished Up to- £1,170 Young people in England in Further Ed with household income less than £32400
April 2011  Tax allowance increased by £1,000 (£776 over RPI x20%) 0 to+ £135 All basic rate taxpayers earning over £6,700 gain
 NIC threshold & NIC rate increased 0 to+ £120 0 to- £200 Employees on less than £20,000 gain, higher earners lose out
 Child Tax Credit increased by £255 (£128 above 5% RPI) 0 to £128 per child Families gain by no. of children x £128, tapered at 41% of income over £6,420
 Working Tax Credit frozen – £96 or- £135 Low wage earners working under 30 hrLow wage earners working over 30 hrs
Increase Tax Credit claw-back (taper) by 2% to 41% Average- £160 Households lose up to 2% of tax creditsUsual loss = (Income less £6420) x 2%
Baby element of Child Tax Credits abolished – £545 Families with new babies or babies under 1 in April 2011
Family element of Tax Credit abolished for higher earners – £545 Families with income between £41,000 and £58,000
Child Benefit frozen – £50 and- £35 For first child up to 16 or 19 if in FT EdAlso -£35 for each other child
Childcare Tax Credit reduced from 80% to 70% Up to- £1560 Families claiming CTC lose 10% of childcare cost. Average= £457 per child
Sure Start Maternity Grant abolished for 2nd + babies – £500 Lower income families having 2nd or subsequent baby
Health in Pregnancy Grant abolished – £190 Babies due after mid April 2011
Benefits & tax credits to rise by CPI, not RPI Up to- £100 Households lose out by around 2% of all benefits – up to around £100
October 2011  Local Housing Allowance rates capped Average- £ 468 Capped at 30th percentile of local rents. 40% of claimants are in low-paid work.
April 2012  Increase tax allowance by £630 (£256 over RPI x 20%) 0 to+ £186 All basic rate taxpayers earning over £7,850 gain
Family element of Tax Credit abolished for middle earners – £545 Lost if income is over £25,000 (1 child)/ £32500 (2 children)/£39000 (3 children)
50+ element of Tax Credits abolished -£1320 or- £1965 People working 16 – 29 hours pwPeople working over 30 hours pw
Couples’ Working Tax Credit based on 24 not 16 hrs pw Potential- £3,870 Couples with children unable to increase hours of work to 24 pw lose all WTC
Working Tax Credit frozenBasic & 30 hour elements – £197 or- £278 Low wage earners working under 30 hrLow wage earners working over 30 hrs
Working Tax Credit frozenCouples/lone parent element – £101 All low-middle wage earners claiming Working Tax Credit
Child Benefit frozen – £100 &- £ 70 For first child up to 16 or 19 if in FT EdAlso -£70 for each other child
Benefits & tax credits to rise by CPI, not RPI Up to- £200 Households lose out by around 4% of all benefits – up to around £200
April 2013  Child Benefit frozen – £150 &- £105 For first child up to 16 or 19 if in FT EdAlso -£105 for each other child
Child Benefit abolished for higher rate taxpayers -£1,055 &- £ 697 Households on over £42,500 lose £1055 for 1st child, also £697 for each other
Working Tax Credit frozen – £303 or- £428 People working under 30 hoursPeople working over 30 hours
Benefits & tax credits to rise by CPI, not RPI Up to- £300 Households lose out by around 6% of all benefits – up to around £300
Start to transfer those on Tax Credits to Universal Credit ? ? Rates unknown as yet but taper increases to 44% (76% for taxpayers)
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