Welfare to Work

DAILY MONITOR: Universal credit, Welfare to work, benefit changes and you, KPMG


Child benefit cut is ‘a tax on aspiration’

Daily Telegraph

GEORGE OSBORNE’S cuts to child benefit for parents earning more than £50,000 amount to “a tax on aspiration”, senior Conservatives are warning.

Mark Field, the Conservative MP for the Cities of London and Westminster, said he was concerned that means testing the payments would prove “ruinously expensive” to administer and appear unfair to hard-working parents.

Child benefit is claimed by 7.8 million families and is worth £20.30 per week for a first child and £13.40 for others.

From January, the payments will be reduced for families with one parent earning more than £50,000. Families with one parent earning more than £60,000 will receive no child benefit. An estimated 500,000 people will need to fill out lengthy self-assessment tax returns for the first time in order to receive the payments, under the reforms.

Mr Field said several Tories feared the plans were a “tax on aspiration”.

Teenagers in care are thrown off cliff edge

The Daily Telegraph

Thousands of vulnerable teenagers are condemned to a life of unemployment and crime by a care system that effectively throws them off a “cliff edge” when they reach their late teens, the children’s minister will warn today.

This year, 36 per cent of 19-year-olds who have been in care are unemployed and not in education or training, up from 33 per cent last year. Among other young people, the rate is around one in 10.

CBI push for growth

The Daily Telegraph

A new report from the CBI published this weekend calls for the Coalition to place more focus on improving the economy outside London and the south east of England.

John Cridland, director-general of the CBI, said the Government must “be bolder” and avoid a “one-size-fits-all” approach to growth across the UK.

Businesses should be given more say in the running of local authorities and the Government must step up investment in Britain’s infrastructure if the country is to build on the economic recovery in the third quarter.

last week’s GDP figures showed the UK economy grew by 1pc from July to September, ending the doubledip recession.

What child benefit cuts mean for you

The Times (27th Oct)

More than a million families will be hit with a tax bill of up to £2,450 when their child benefit is withdrawn next year.

Child benefit is paid tax-free to one parent for each child under 16. The parent gets £20.30 a week for the eldest child and £13.40 for extra children, giving £1,056 yearly for a first child, £1,752 for two children or £2,449 for three.

The changes

Controversially, the changes only take into account the highest earner, not the total household income. So take a household where each parent earns £50,000. Their combined income is £100,000, yet they will still receive the full child benefit. But a household where one parent earns £60,000, and the other stays at home to look after children will lose the full amount.

Affected households will not simply receive less child benefit every month. Instead, they will receive the same amount as before and be forced to pay a tax charge.

This will involve filling out a selfassessment tax return. The Government estimates that 500,000 households will be dragged into self-assessment for the first time. Alternatively, you can opt out of child benefit and avoid the tax charge. However, stay-at-home parents should continue to complete claims for new children (even though they will not receive any child benefit) to safeguard their national insurance credits, which count towards a state pension.

Universal credit ‘risks IT meltdown and may leave thousands worse off’

The Times

A study from the Joseph Rowntree Foundation claims that thousands of families would be worse off or only slightly better off under the scheme to be introduced next year. It also warns that the system, reliant on a potentially risky IT system, could be more complicated than predicted.

The Joseph Rowntree Foundation claims that combining welfare benefits into a single universal credit could trap people in poverty and stop claimants finding full-time jobs, the Government will be warned today.

Dame Tanni Grey-Thompson, a crossbench peer, recently warned that 450,000 disabled people could lose out financially from the reforms, leaving them “ghettoised”.

The foundation says that the scheme, aimed at encouraging people to find work, will lure them into “mini-jobs” of less than 16 hours a week. It suggests that this will affect second earners hardest. Marginal increases in earnings alone are unlikely to be sufficient incentive to move into full-time work.

the aim to simplify benefits by using one payment is undermined by the Government’s decision to let town halls administer council tax benefit and crisis loans. “Separate means tests and eligibility rules for council tax benefit will create complexity and is likely to be so aggressive as to leave some people worse off as their earnings rise,” it says.

The shift from fortnightly to monthly payments in arrears has already raised concerns that families on low incomes will run out of money.

Work experience isn’t real experience of work

The Times

Margaret Mountford off Lord Alan Sugars Apprentice writes a very interesting article in the Times.

The youth unemployment figures are unremittingly bleak. There are at present 17 million young jobless people in the EU, just under 1 million of them in the UK and this year’s school leavers are expected to face the worst employment prospects for 20 years. The International Labour Organisation is predicting that on, a global scale, youth unemployment will continue to rise for the next five years.

The youngsters had sworn … that they were desperate for work, but some of their attitudes suggested otherwise. ….. By contrast, the pensioners who went back to work understood exactly what was required.

Ed Miliband and Boris Johnson support the Living Wage.

The Independent

Yesterday’s report by KPMG sets out the scale of the national crisis of working poverty. Living Wage Week, starting next Monday, will showcase the success of the simplest and best solution: pay people enough to live. And the arguments are compelling.

Behind the 4.28m statistic of those working for less than a Living Wage are countless human stories of hardworking mums and dads doing two or three jobs to make ends meet. This leaves children with no-one to help with homework or look after them of an evening. Read wasted potential and community turmoil. These were the stories that led London Citizens to launch the campaign in 2001.


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