Blog Archives

Usdaw Timetable for Cuts Affecting Working Family Budgets (Updated)

Here’s an updated version of the Usdaw timetable on cuts and their impact on family budgets, original version of which is here.

Date Cut / Change

+ Gain £

– Loss £

Who’s Affected
January 2011 VAT increased by 2.5% to 20%

Average

– 307

Average households pay £307 more

Average 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 (£700 over RPI x20%)

0 to

+ 140

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 (£150 above 4.6% RPI)

0 to +150 per child

Families gain by no. of children x £150, tapered at 41% of income over threshold
Working Tax Credit frozen, basic and 30 hour elements

– 90 or

– 125

Low wage earners working under 30 hr

Low 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 credits

Usual loss = (Income less £6420) x 2%

Couples/lone parent element of WTC rose by CPI, not RPI

– 25

All low-middle earning couples and lone parents claiming Working Tax Credit
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

– 49 and

– 32

For first child up to 16 or 19 if in FT Ed

Also – £32 for each other child

Childcare Tax Credit reduced from 80% to 70%

Up to

– 1,560

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 to rise by CPI, not RPI

– 50

Households lose out by around 1% of all benefits – around £50
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 (£250 over RPI x 20%)

0 to

+£190

All basic rate taxpayers earning over £7,850 gain
Child Tax Credit rises by CPI, but previous increase applies

0 to +150

per child

Families gain by no. of children x £150, tapered at 41% of income over threshold
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

-1,320 or

– 1,965

People working 16 – 29 hours pw

People 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 frozen

Basic & 30 hour elements

– 205 or

– 285

Low wage earners working under 30 hr

Low wage earners working over 30 hrs

Working Tax Credit frozen:

Couples/lone parent element

– 135

All low-middle earning couples and lone parents claiming Working Tax Credit
Child Benefit frozen

– 112 and

– 73

For first child up to 16 or 19 if in FT Ed

Also – £73 for each other child

Benefits & tax credits to rise by CPI, not RPI

– 100

Households lose out by around 2% of all benefits – around £100
April 2013

 

 

 

Increase tax allowance by £1335 (£1125 over RPIx20%)

0 to

+ 420

All basic rate taxpayers earning over £8,105 gain
Child Tax Credit capped at 1% – limits previous increase

0 to +110

per child

Families gain by no. of children x £110, tapered at 41% of income over threshold
Child Benefit frozen

– 143 and

– 94

For first child up to 16 or 19 if in FT Ed

Also – £94 for each other child

Child Benefit abolished for higher rate taxpayers

-1,055 &

– 697

Households on over £50,000 lose up to £1055 for 1st child, & £697 for each other
Working Tax Credit frozen:

Basic and 30 hour elements

– 260 or

– 365

People working under 30 hours

People working over 30 hours

Working Tax Credit: Couples/

Lone Parent part rises by 1%

– 170

All couples and lone parents on Working Tax Credit lose out
Bedroom Tax – 14% or 25% of Housing Benefit

– 624 or

– 1,144

540,000 households – 1 spare bedroom

120,000 households – 2 spare bedrooms

Council Tax Benefit cut

 

Up to – 250

Up to – 600

Up to 2.5m recipients not in employment

Almost 700,000 recipients in employment

DLA changed to Personal Independence Payments

Average

– 2,480

IA says 500,000 will cease to qualify for support, saving £1.24bn by 2015/16
Benefit Cap (in 4 Councils, nationwide from September)

Average

– 4,836

56,000 households will have their benefit reduced by an average £93 per week
Benefits & tax credits to rise by CPI, not RPI

Up to

– 150

Households lose out by around 3% of all benefits – up to around £150
Localisation of the Social Fund

Loss of Safety Net Community Care Grants & Crisis Loans abolished. No ring-fenced funding devolved to Councils.
October 2013 Universal Credit: marginal deduction rate rises to 76%

Average

+ 2,016

Average

– 1,644

3.1m will gain on average £168pm

2.8m will lose an average £137pm

April 2014 Child Tax Credit capped at 1% (reduces the 2011 rise)

0 to + 65

per child

Families gain by no. of children x £65, tapered at 41% of income over threshold
Working Tax Credit increases capped at 1% (after freeze)

– 295

– 415

People working under 30 hours

People working over 30 hours

Working Tax Credit: Couples/

Lone Parent part rises by 1%

– 205

All couples and lone parents on Working Tax Credit lose out
Child Benefit increases capped at 1% (after freeze)

– 162 and

– 107

£162 less for the first child

£107 less for each subsequent child

April 2015 Child Tax Credit capped at 1% (reduces the 2011 rise)

0 to + 5

per child

Families gain by no. of children x £5, tapered at 41% of income over threshold
Working Tax Credit increases capped at 1% (after freeze)

– 345

– 485

People working under 30 hours

People working over 30 hours

Working Tax Credit: Couples/

Lone Parent part rises by 1%

– 255

All couples and lone parents on Working Tax Credit lose out
Child Benefit increases capped at 1% (after freeze)

– £189 and

– £124

£189 less for the first child

£124 less for each subsequent child

Advertisements

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)