A Government reform that will bring together tax and benefit credit under a universal credit system will affect parents the most come 2015, according to a study by the Institute for Fiscal Studies.
The study suggests 500,000 families with children aged 5 and under will actually fall into poverty by 2015- 2016, reports the Guardian.
Parents with two children will be £1,250 worse off annually, while couples without kids will see a loss of £215 a year, by 2015. The report, which was commissioned by the Family and Parenting Institute charity (FPI), indicates that families with children under 5, more than two children or with a single, unemployed parent will “shoulder the burden of austerity”.
Single parents who aren’t working could see a loss of 12% of their yearly earnings – that’s £2,000- while larger families will also see a disproportionate loss of cash.
The planned universal credit system is shown to actually further damage a family’s financial security, according to the report, with families expected to be 6% worse off than if the system hadn’t changed.
Dr Katherine Rake, chief executive of the Family and Parenting Institute, claims that the reform gives parents “an extra penalty of more than £1,000”. Dr Katherine said, “It is particularly surprising to see that some of the most vulnerable groups – such as families with new babies and lone parents out of work – are bearing the brunt of the tax and benefit reforms.”