379,500 lower paid London working families get average £145 per week in tax credits to support incomes

Welfare

379,500 lower paid London working families get average of £145 per week in child and working tax credits to support family incomes.

These in work families in receipt of tax credits face hidden cuts of up to  £30 per week when government seek cuts of £3.1 billion with introduction of universal benefits says GMB London.

In December 2016 there were 379,500 working families in London in receipt of child or working tax credits. The latest geographical analysis from 2014/15 shows that they got an average of £145 per week or £7,551 per year.

In Newham there are 24,300 working families currently receiving child or working tax credits worth an average of £149 per week. Next is Enfield with 20,800 getting an average of £154 per week followed by Brent with 19,100 (£148 per week), Ealing with 17,200 (£143 per week) and Croydon with 16,700 (£144 per week). The figures for all 33 London boroughs are set out in the table below.

In the UK, 2,943,000 in-work families are getting child or working tax credits receiving an average of £127 per week or £6,589 per year.

From 6 April 2017 most people will only get the child element of child tax credit for up to 2 children and Working age benefits have also been frozen until April 2020. In addition these taxes credits are being replaced with the new universal benefits system that is planned to be fully phased in by 2021.

This analysis of the numbers of working families in receipt of tax credits have been completed by GMB London using official data from Government departments   See notes to editors for sources and definitions plus regional data. 

Warren Kenny, GMB London regional secretary, said, “Last year the Government backed down on the issue of cutting tax credits for over 2.6 million working families. 

However, the Government is committed to finding £3.1 billion in welfare cuts from working families. The way they plan to do it is to make the cuts by the backdoor by reducing the amount paid in tax credits when they change the system to Universal Credit. Universal Credit is being brought in to replace working and child tax credits and should be in place by 2021.

GMB is warning that over 2 million in-work families who currently receive benefits that will be replaced with Universal Credit face a potential threat of up to £30 per week being cut from their weekly incomes.

From 6 April 2017 most people will only get the child element of child tax credit for up to 2 children meaning there will be no financial support within child tax credit or Universal Credit for any third or subsequent child born after 6 April 2017.

Working age benefits have also been frozen until April 2020 with no increases to take into account the rise in living costs.

Universal credit is being rolled out across the UK and will replace working and child tax credits, housing benefit, jobseekers allowance, income support and Employment and Support allowance and should be introduced by 2021.  This is when these working families will be hit by cuts of up to £30 per week.

Due to the complexity of the benefits system and the sheer variety of different family circumstances the Government hope to hide these huge cuts in the incomes of working families in plain sight because these variables make comparison very difficult.

GMB London is calling on Labour MPs to highlight and fight against these cuts.”

End

Contact: Keith Williams 07710 631339; Shaun Graham 07885 706556; Tony Warr 07710 631336

Notes to Editors

1 Sources: HM Revenue & Customs, Child and Working Tax Credits Statistics:

Geographical analysis December 2016; Table 3, Recipient families receiving Child or Working Tax Credit in each local authority, April 2016.

Finalised annual awards 2014-15 Geographical Analysis; Table 2 Average number of benefiting families and average annual entitlements in each local authority, 2014-15. 

2 National and regional figures for working families in receipt of tax credits and average annual entitlement