3,800 families in Southampton could lose out from welfare changes

Southampton MP warns that 3800 city families could lose out from changes to Working Tax Credits and Child Tax Credits this week whilst further welfare changes over the next year will have the greatest impact in the city’s poorest areas.

Changes to Working Tax Credits and Child Tax Credits coming into place on Friday 6 April will cost thousands of Southampton families hundreds of pounds each if they are unable to increase their hours of work.

Upcoming changes to Disability Living Allowance, Incapacity Benefit and Income Support planned for the next year will have the greatest impact in the city’s poorest wards as thousands more city residents will find themselves struggling to find work or extra hours in an already crowded job market.

  • 335 Southampton families will be at risk of losing £2600 a year if they are not able to find extra hours after the Working Tax Credit changes come in on Friday 6 April 2012. The new measures, which affect couples working a combined total of between 16 and 24 hours per week, will cost each family £50 a week if they are unable to find the extra hours.

    A couple living in Southampton’s lowest Council Tax Band working a combined 16 hours per week on minimum wage will be £73 a week worse off. The same couple would actually be £14 a week better if they were to leave work and claim out-of-work benefits. [1]

  • Up to 3,500 Southampton families will no longer receive Child Tax Credit, losing around £545 each as 114,600 households in the South East will lose all tax credits after Friday 6 April 2012. [2]
  • Other changes to benefits in Southampton planned for May 2012 and April 2013 mean that 360 single parents, 2250 people on Disability Living Allowance and 1100 of those people previously in receipt of Severe Disability Allowance (SDA) or Incapacity Benefit (IB) will need to find work. 660 people on SDA or IB in Southampton will lose all entitlement to benefits. [3]
  • Most of the new cohort of jobseekers will come from the poorest wards, creating even more competition for a declining number of vacancies in the coming year:

Redbridge: 443 more people will be looking for work

Bitterne: 420 more people will be looking for work

Bevois: 417 more people will be looking for work

Woolston: 381 more people will be looking for work

Millbrook: 356 more people will be looking for work

John Denham, Labour MP for Southampton Itchen, says:

“Changes to Working Tax Credits and Child Tax Credits coming into force on Friday will leave thousands of Southampton families worse off if they are unable to find the extra hours of work they need.

“The Government is sending out the wrong message by creating a situation where many parents that are in work but struggling to find extra hours will be worse off than those on out-of-work benefits. At the same time, thousands of those previously on Income Support, Disability Living Allowance, Severe Disability Allowance and Incapacity Benefit are now being asked to find work whilst unemployment is rising and there are less and less vacancies.

“We all need to meet the challenge posed by hundreds of new jobseekers, many of which are in the poorest areas, as a result of these changes. For example, instead of spending billions of pounds on a tax break for those earning over £150,000, the Government could be using some of this money to support the hundreds of parents in Southampton struggling to find extra hours of work.”

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