Changes to tax credits will impact on 'most vulnerable', claims academic

"What we have seen with these, and other elements of welfare reform, is a reduction in income for some of the most vulnerable members of society who are the least equipped to make the 'informed choices' the Government demands."

Richard Machin, Lecturer in Social Welfare Law

An Staffordshire University academic has warned that little known changes to tax credits due to take effect today (Thursday April 6) will leave thousands of families worse off.

Richard Machin has called on advisers and campaigners to monitor the impact of the policy which means the child element of Universal Credit (UC) and the individual child element of Child Tax Credit (CTC) will no longer be awarded for the third or subsequent children born on or after 6 April 2017.

First announced in 2015, former Prime Minister David Cameron and Chancellor George Osborne, argued that these changes were necessary to deliver a fair deal to the taxpayer and to incentivise work.

But writing in Advisor Richard Machin, lecturer in social welfare law, said: “The impact assessment carried out by the Government makes it clear that well over half a million families will be affected by the two-child policy and that the Treasury will make significant savings.

“What is less clear is the extent to which this policy will produce the behavioural changes the Government wishes to see. There is little evidence to suggest the introduction of the 'bedroom tax' and the roll-out of UC have resulted in the changes in behaviour that the Government intended - for example, downsizing to smaller properties or managing a household budget on a monthly basis.”

Consultations on the proposals took place last Autumn and Government published its response earlier this year accepting a number of exceptions to the policy including multiple births.

However, Richard states that restricting the child element of CTC means that each family in receipt of tax credits will lose upto £2,780 for each additional child per year.

He added: “What we have seen with these, and other elements of welfare reform, is a reduction in income for some of the most vulnerable members of society who are the least equipped to make the 'informed choices' the Government demands. Advisers and campaigners will need to monitor the impact of the two-child policy and support claimants with the exceptions rules where these apply.”

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