Families facing a tax credit bombshell (From Swindon Advertiser)

Families facing a tax credit bombshell

11:48am Thursday 16th February 2012 in News

NEARLY 700 poorer families in the Swindon area will be hit by a tax credits bombshell within weeks, Labour has warned – losing nearly £4,000 a year.

The alarm was raised over little-noticed changes that will affect couples in lowly-paid part-time work who receive the income top-ups from the Government.

At present, parents are eligible for working tax credit if they work 16 hours a week - but, from April 6, that threshold will be raised to 24 hours a week.

Yet, the switch comes at a time when many staff are being forced to cut back their hours because of the economic slump.

One in five employers have slashed hours, according to a recent survey by the Chartered Institute For Personnel And Development, while only six per cent have increased them.

According to Treasury figures, obtained by Labour, there are 695 families in Swindon and North Wiltshire currently receiving working tax credit, but working fewer than 24 hours a week.

However, the Treasury pointed to this year’s 5.2 per cent rise in both working age benefits and the child element of the child tax credit – worth up to £135 extra a child.

A spokesman said: “These figures ignore a range of other measures being taken to help working families.

“We also know that families are worried about the cost of living and so we’ve cut fuel duty and frozen council tax.”

The Revenue and Customs website explains that either one parent must work 24 hours, or that joint hours must reach 24, before adding: “If neither of these apply, your working tax credit will stop from April 6, 2012.”