Low-income working-age households lost most from Coalition’s tax and benefit changes
Low-income working-age households have lost the most as a percentage of their income as a result of tax and benefit changes introduced by the coalition government, mainly as a result of benefit cuts, while middle-income working-age households without children have gained the most, according to the Institute of Fiscal Studies (IFS) recent briefing paper.
Losses from benefit cuts average £477 per household.
The research conducted by the IFS reveals that the Coalition’s tax and benefit changes have reduced household incomes by £1,127 a year or 3.3% on average. Losses from benefit cuts average £477 per household.
The IFS highlights that overall £30,225 has been taken away by tax and benefit measures. Also, that the richest tenth of households only lose the most as a percentage of income when the increased tax for those on high incomes, introduced by Labour government’s in April 2010, is factored in i.e. before the Coalition government came to power.
‘The Effect of the Coalition’s Tax and Benefit Changes on Household Incomes and Work Incentives’ IFS briefing paper is available at: http://www.ifs.org.uk/publications/7534
The findings of the IFS paper reflects those of the EHRC’s research report, which revealed that the impacts of ‘tax and welfare reforms are more negative for families containing at least one disabled person, particularly a disabled child, and that these negative impacts are particularly strong for low income families’. The report, published in the summer of 2014 also revealed that ‘modelling cumulative impact assessment by equality group is feasible and practicable’, which is challenges the government‘s position that no organisation was able to a such cumulative impact ‘robustly’.
The EHRC report on the cumulative impact assessment on impact of tax, welfare and other spending changes in the 2010-15 period on people with different protected characteristics is available at the Equality and Human Rights Commission’s website.
The Coalition government’s position was also challenged by the Social Security Advisory Committee (SSAC) in its ‘occasional paper’ published in April 2014, which recommended that the Government produces further analysis of the data …., ‘bringing together the cumulative impact of welfare reform on vulnerable groups such as disabled people, and with the findings published within six months’. Unfortunately 10 months later disabled people are still waiting. The SSAC’s paper is available at www.gov.uk.