Tax credits bombshell as 635 couples in Coventry North East stand to lose nearly £4,000 a year

635 couples with children in part-time work in Coventry North East could lose around £4,000 a year from this April, following a change to tax credit rules being introduced by the Government.

Bob Ainsworth is urging the Conservative-led Government to reconsider a little-noticed change to tax credit rules which means thousands of families will lose all of their working tax credits unless they can significantly increase their working hours.

The change means that couples with children earning less than around £17,700 will need to increase the number of hours they work from a minimum of 16 to 24 hours per week or they will lose all their working tax credit of £3,870 per year.

Government figures revealed in parliamentary answers to Labour’s shadow Treasury minister Cathy Jamieson MP show 635 households in Coventry North East and 212,000 households across the country households could lose out.

A recent survey by the Chartered Institute for Personnel and Development found that one in five organisations have cut back on the number of hours that people work as a result of the economic downturn, with just 6 per cent increasing them.

Research carried out by Usdaw (the Union of Shop, Distributive and Allied Workers) shows that 78% of their members who will be affected by the change cannot get the extra hours of work they need.

Bob said:

“This change is extremely unfair and demonstrates how increasingly out of touch the Government is with hard-working parents up and down the country who are feeling the squeeze on their living standards. 

“Here in Coventry, the change means that 635 couples with 1510 children in my constituency alone will stand to lose nearly £4,000 a year, or £75 a week.  For many families it will mean that going out to work will no longer pay and they’ll be better off on benefits. That makes no economic sense at all. 

“This tax credits bombshell is now just a few short weeks away. The government urgently needs to think again.”


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