Why tax credit cuts have NOT been scrapped in the spending review

Everyone is talking about how George Osborne scrapped his tax credit cuts completely in today’s spending review.

Except that’s not true.

Yes, the Chancellor ditched the two main elements of the £4.3bn reform. But that isn’t the same as a full U-turn.

His claims during today’s Autumn Statement unravelled within minutes when the Mirror asked Treasury officials for detail.

Families will still be barred from claiming child tax credits for more than two children, exactly as was planned before.

That rate is worth £2,780 per child. Multiple births will be protected.

The ‘family element’ of £545 a year is also still being scrapped.

In theory, the ‘third child rule’ only applies to children born after April 2017. If you have four children already you’re in the clear.

But if you want to keep claiming for big families after 2017, you must continue claiming child tax credits without a break .

If you stop claiming for more than 6 months , then go back to a low wage, you’ll only be paid as if you have two children – because it counts as a ‘new claim’ .

Anyone who claims for the first time after April 2017 will also count as a new claim , regardless of when their children were born.

The ‘income rise disregard’ will still be halved as planned. So what is this?

Currently your income can rise by £5,000 within the year you’ve claimed for, without you having to recalculate and pay your tax credits back.

From April 2016, that amount is being halved to £2,500.

Tax officials will pay hard-hitting private debt collectors to target families who owe the government more than £3,000.

During his speech the Chancellor said: “Tax credits are being phased out anyway as we introduce universal credit.”

The one-size-fits-all benefit is being rolled out slowly over the next few years and will replace tax credits anyway.

PCS union boss Mark Serwotka today warned the ‘pain’ could be ‘delayed’ until when Universal Credit is introduced

All working-age benefits including tax credits are being frozen for 4 years – longer than the 2 years previously pledged by the Tories.

This means the amount paid will gradually lose its value as prices go up with inflation.

Source: Why tax credit cuts have NOT been scrapped in the spending review

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1 thought on “Why tax credit cuts have NOT been scrapped in the spending review

  1. Dez

    Now that’s more like the old Hoorays ie say one thing but covertly do another quietly under the table. And there’s good old public thinking the Hoorays have actually got hearts……..whilst quietly pulling the carpet from under their feet…..enjoy.

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