A family who have a third child born from this Thursday onwards will be £50,000 worse off over 18 years than a family whose third child is born before Thursday.
Latest figures from across the UK indicate that 250,000 children will be pushed into poverty over the next few years because of the child tax credit change which begins this week. It is estimated that the two-child policy will raise child poverty levels by 10% by 2020 – with much of the saving wiped out by the increase cost of emergency support for those in extreme poverty.
The changes will also remove thousands of pounds from bereaved families, where a parent has died after the 6 April cut-off date. The new policy only provides payments to families for a maximum of 18 months.
Daniel Zeichner MP said: “Let’s be under no illusion. This is an attack on the very families the Prime Minister claimed to protect, those judged to be ‘Just About Managing’ in low paid work. The brunt of the cuts will have a disastrous impact on the poorest children in Cambridge. Effectively the Government is cutting £12bn from welfare while providing over £2bn a year in income tax cuts for the wealthiest families in the UK.
“The vast majority of people with more than two children are in work; many fall on harder times because one parent has taken on part-time work. Few would argue that essentially punishing child – for circumstances beyond their control – meets the basic standard of decency one would expect from a compassionate society. It’s frankly disgusting.
He added: “If a family finds itself in the terrible position of suffering from a parental death, the remaining parent now has 18 months before being abandoned by the state, rather than when your youngest child leaves full-time education”
Last month, Daniel Zeichner MP raised concerns over the roll-out of Universal Credit for new benefit claims which is due to be completed next year. That intervention followed a report by the Child Poverty Action Group (CPAG), published in March, on the impact of universal credit on family incomes, work incentives and poverty rates.
CPAG found that as a result of the cuts made to the universal credit, on average, couples with children will be thousands a year worse off on average and lone parent families will be £2380 a year worse off. Pensioner couples will be £40 a year worse off. The report also showed that rewards from work have been reduced considerably and, for single parents, the incentives to move into mini-jobs has been reduced by the work allowance cuts.
CPAG has made a series of recommendations to reduce poverty caused by the transition to universal credit. Applying a triple lock to the child element of universal credit could keep up to 500,000 children from poverty. Restoring work allowances could keep up to 300,000 children from poverty. Lifting the two-child limit could keep up to 200,000 children from poverty.
The Cambridge City Council area is due to transition in May 2018 and, according to the Children’s Society, the introduction of Universal Credit will impact 6,700 children in the city.
Research by the Children’s Society in January 2017 showed that, of the 20,106 children in Cambridge, nearly 4,000 live in poverty. 1,100 of these children live in working households where at least one person is in employment. 3,640 children in Cambridge lie in families suffering from debt problems.
Daniel Zeichner MP said: “The roll-out of Universal Credit is increasing poverty and inequality by removing incentives to work.
“There is a year to go before Cambridge is due to transition to Universal Credit. Ours is already a city of two halves where many families struggle to make ends meet. I urge the Government to follow the advice of CPAG to protect children and provide better incentives to work.”
Josie Tucker, author of the CPAG report, said: “This analysis shows that Universal Credit cuts will hit families with children hardest, and will be poverty-producing to the tune of around a million children.”