Benefit cuts in Wales ‘to exceed £590 million’

People in Wales will suffer annual benefit cuts totalling at least £590 million by 2014-15, according to a study commissioned by the Welsh Government. Families with children will lose out the most, the analysis concludes, along with those on low-to-middle incomes.

Key findings

  • Changes to the UK benefits system announced by the coalition prior to the December 2012 Autumn Statement will reduce total benefit and tax credit entitlements for people in Wales by around £590 million a year by 2014-15.
  • Additional cuts announced in the Autumn Statement – in particular the 1 per cent cap on benefit uprating – mean total losses will be even higher than this.
  • The biggest single loss of income will be felt by around 350,000 working-age benefit claimants, and 330,000 families in receipt of tax credits, as a result of uprating most benefits by the consumer price index (CPI) rather than the retail price index (RPI).
  • Cuts to disability benefits account for some of the biggest income losses in Wales. Approximately 42,500 claimants are expected to lose their entitlement to disability living allowance by May 2018, equivalent to around £55–83 a week on average.
  • Low-to-middle income families, and non-working families with children, will be the worst hit household types. On the other hand, pensioners, and families without children in which all adults work, will be largely protected from the cuts.

SourceAnalysing the Impact of the UK Government's Welfare Reforms in Wales: Stage 2 Analysis, Welsh Government | Stuart Adam and David Phillips, An Ex-Ante Analysis of the Effects of the UK Government's Welfare Reforms on Labour Supply in Wales, Report R74, Institute for Fiscal Studies
Links: Report | Summary | IFS report | Welsh Government press release

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