People on the lowest earnings stand to lose two-thirds of the intended increase to their untaxed income when universal credit and the personal tax allowance start to interact, according to campaigners.
The charity Gingerbread commissioned research into the impact of universal credit on working single parents once it is introduced in October 2013.
Politicians must ‘grasp the nettle’ of tax reform, according to a think-tank report. The existing system of redistribution through tax and benefits is inefficient, and needs to be replaced by one that provides ‘redistribution at lower cost’.
The report draws on findings from the Mirrlees review (2011) and the Commission on Living Standards (2011). It sets out structural reforms designed to improve support for households on low-to-middle incomes. Simply making the existing system more generous to this group will not be sustainable in the long run, it argues.
Many of society’s most vulnerable people have been left in a ‘fragile’ state by the economic downturn and cuts to public services and benefits, according to a new study.
Researchers examined the lives of around 100 vulnerable people living in one north London borough. They used focus groups, face-to-face interviews and ethnographic studies in which researchers shadowed residents for a day. They focused on three groups: disabled residents and carers, young people, and families on low incomes.
Tax credits have not had the effect of forcing down wages for low-paid workers, according to a think-tank report. Overall, tax credits have had a number of successes and are popular with those who get them. But the new universal benefit system, coming in from 2013, means the purpose of tax credits needs rethinking.
The report looks at the direct and indirect impacts of tax credits introduced under the previous Labour government.
The government’s austerity strategy is disproportionately hurting those on the lowest incomes, according to an Oxfam report. It describes a ‘perfect storm’ of factors – increasing unemployment, a lack of decent jobs, rising living costs, falling incomes and deep cuts to welfare and public services – hitting the most vulnerable people, both in and out of work.
The report combines an analysis of the recession’s effects with a series of policy recommendations.
Reductions in relative poverty continued in 2010/11, according to the latest official figures. But unlike in previous years, this did not reflect rising absolute living standards among poorer households – instead, it reflected big falls in median incomes.
The annual report examines trends in the number of UK households on below-average incomes.
A think-tank report has said that for more than a decade before the global financial crisis households on low-to-middle incomes relied on borrowing to fund much of their spending.
The report says that, over the 10-year period of 1997–2007, spending grew faster than incomes across all households, but for the poorest groups this phenomenon was much more pronounced.
Almost one in five people (18 per cent) are finding it increasingly hard to afford essentials such as food and energy bills, according to new polling data from the Resolution Foundation think tank. The number of those expecting their financial situation to get worse in the next year has risen to more than one in four.
The poll is the latest quarterly tracker of household finances, carried out by Ipsos MORI. The poll found that:
Current government policy on social justice hinges on the claim that there are 120,000 ‘troubled’ families in Britain but this is deeply flawed, argues Professor Ruth Levitas in There may be ‘Trouble’ Ahead: What We Know About Those 120,000 ‘Troubled’ Families (PSE: UK, policy working paper 3). The government programme defines ‘troubled families’ as ‘characterised by there being no adult in the family working, children not being in school, and family members being involved in crime and anti-social behaviour’. But the 120,000 figure derives from households experiencing multiple deprivations, with no evidence that they are involved in crime or anti-social behaviour. Levitas, a member of the PSE: UK research team, comments:
An updated analysis from the Institute for Fiscal Studies suggests that the combined effect of all the tax and benefit changes effective from April 2012 would be an average loss of £511 per year for households with children. In Tax and Benefit changes, excluding those affecting mainly the very rich, the Institute for Fiscal Studies takes into account a long list of changes, some announced as long ago as the 2010 Budget but only coming into force now.
It shows: