Comprehensive Spending Review: Child benefit cuts could act as work disincentives

Responding to yesterday’s Comprehensive Spending Review announcement that the Government will cut the support for childcare costs through tax credits from 80% to 70% Sarah Jackson, chief executive of Working Families said: "Reducing funding for childcare costs makes it £30 a week harder for a parent to go back to work.  The Government currently pays up to 80 per cent of childcare costs for working families up to a maximum of £240.  In future, a parent returning to work will only get a maximum of £210 help.  We know that high childcare costs are a significant work disincentive and parents struggle to pay them now.  It is difficult to imagine how this cut will support the Government’s promise that work will always pay.
 
"We’re also disappointed that couples will now have to work at least 24 hours a week to be entitled to Working Tax Credits.  A single earner on the minimum wage working 16 hours a week will see their family’s income reduced to less than the amount they’d get from claiming Jobseekers’ Allowance as a couple– a real disincentive to work.
 
"Why is the Government creating disincentives for part time work now?  With almost a half a million jobs in the public sector under threat, the Government should be sending out clear messages about limiting job losses through flexible and part time work.  The first step before making anyone redundant should be to bring the team together to see if changing hours is a real alternative to job losses. There are recent examples of private sector businesses reducing hours and saving both jobs and money.  Ask the team for solutions and people will start thinking ‘we are all in it together’."

This article was first published on hrmagazine.co.uk