Union warning on tax credit changes

MoneyTax credit changes will leave some families £3,000 a year worse off by 2015, according to the TUC.

It warned that many parents could be in for a shock because they have not yet realised how much the reforms will cost them.

A family with parents earning £25,000 and £15,000 paying childcare of £300 for their two children could lose over £3,000 a year by 2015/16, the organisation said.

The TUC has updated its online tax credit calculator to take into account changes in the system, such as the abolition of the baby element of the benefit and the increase in working hours eligibility for some payments

TUC general secretary Frances O'Grady said: "The Government should be prioritising support for working families but seems more interested in coming up with new ways to squeeze their living standards.

"This calculator highlights the huge amounts some households will lose in tax credits by 2015/16, with some families over £3,000 worse off. This is far more than they will gain from the increased personal allowance, and that's before wider cuts and VAT rises have even been taken into account.

"Cutting tax credits is not the way to get our economy moving again but is part of a wider assault by ministers on vital family benefits. Making families poorer is no way to start an economic recovery."
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