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Friday, 19 December 2014

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Tax credits ‘bombshell’ for Cumbrian families

New benefit rules will see thousands of Cumbrian families lose state payouts worth hundreds of pounds a year.

Official figures show that 6,605 families across the four parliamentary constituencies of Carlisle, Copeland, Workington and Penrith and the Border could be hit through changes to Child Tax Credits and Working Tax Credits introduced by Chancellor George Osborne.

The two main changes to tax credits which came in on Thursday are a reduction in the income limit for Child Tax Credit, from about £40,000 to about £26,000 for a family with one child, and an increase in the number of hours couples with children have to work to be eligible for Working Tax Credit, from 16 to 24 hours a week.

Across the four areas this will means about 5,800 families “on low or modest incomes” will lose the Child Tax Credits worth £545 a year, and up to 805 working couples earning less than £17,000 per year will lose all of their Working Tax Credit – worth up to £3,870 per year – if they cannot increase their working hours.

Critics have branded the changes to the welfare support a “tax credits bombshell”.

But the Government has hit-back claiming the average household would be £6.50 a week better off following last month’s Budget.

Labour’s Shadow Chancellor Ed Balls said: “Families on middle and low incomes are facing a tax credits bombshell from David Cameron and George Osborne.

“For all the Government’s talk about increasing the personal allowance, these independent figures show that while they may be giving one with one hand they are taking much more away with the other hand.”

But Chief Secretary to the Treasury Danny Alexander defended the moves saying government had taken some “very difficult decisions” on tax and benefits but insisted they had been “fair”.

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