April 6, 2012 10.32 am This story is over 113 months old

Hundreds of Lincoln families set to lose £511 per year in benefits and tax credits

Losing out: 1,500 families with children in Lincoln will lose an average of £511 a year from changes to tax, benefits and tax credits.

— Updated on April 10 with comment from Conservative Lincoln MP Karl McCartney

More than 1,500 families with children in Lincoln are set to lose an average of £511 a year from changes to tax, benefits and tax credits introduced from Friday, April 6.

The figures come from the Institute for Fiscal Studies following last month’s budget, and were highlighted by Labour, but debated by the Prime Minister.

Around 12,530 households across Lincolnshire will also be affected.

Following the changes to working tax credit, a couple with two children on the minimum wage will be better off quitting their jobs if they cannot work at least 19 hours per week.

The change to tax credits is a reduction in the income limit for Child Tax Credit from around £40,000 to around £26,000 for a family with one child.

There is also 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 per week.

In Lincoln, the number of families set to lose all their Child Tax Credit and Working Tax Credit if they cannot increase working hours reaches 1,560.

Of these, 260 households working between 16 and 24 hours per week are set to lose Working Tax Credits because of hours rule change.

Some 1,300 Lincoln households are no longer entitled to tax credits from this month.

Following changes to working tax credit, a couple with two children on the minimum wage will be better off £14 per week if they work 16 hours, £8 for 17 hours or £2 for 18 hours per week.

The IFS figures also show that pensioners will be an average of £315 a year worse off from April 2014 once cuts to their allowances in the budget — dubbed the ‘granny tax’ — have kicked in.

Lucy Rigby, Lincoln Labour’s parliamentary candidate in the next general elections, said: “At a time when families are struggling to make ends meet, this is incredibly worrying.

“I want to know why the government is choosing to hurt working families to pay for tax cuts for the richest. It’s obvious to me that we should be supporting families and supporting work.

“These changes do the polar opposite – some families will be better off on benefits,” she added.

— Update on April 10: Lincoln’s Conservative MP, Karl McCartney, said: “As a result of this government’s decisions, from 6 April, 24 million households will be £338 a year better off – that is £6.50 a week.

“We are taking millions out of tax altogether by raising the personal allowance, which will put up to £126 back in people’s pockets. The basic State Pension is also going up by its largest ever cash sum and there are increases in most other benefits.

“This is an achievement to be proud of. We have managed to cut taxes for millions and even lift millions out of tax completely despite the fact that we inherited the largest structural deficit in the developed world.

“Labour left the country’s finances in a mess, and we have had to clear it up. In doing this, we have of course had to make some very tough decisions.

“But these changes will mean hardworking families in Lincoln will see their Council Tax frozen and their Income Tax cut or removed altogether.

“This is an achievement to be welcomed, rather than attacked, as Labour have done. It shows our commitment to helping and rewarding the hardworking families of Britain and those who have aspirations to help themselves.”

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