Welfare cuts mean that "work doesn't pay"

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• 12 Mar

  A report has found that some people are losing 97p of every £1 earned after they're hit by welfare cuts.

  The public accounts committee has warned that cuts to council tax benefits means "work does not pay" for people worse affected by the reforms.

  The report said that the Department for Work and Pensions were "not fully understanding" of the impact council tax benefit cuts combined with other welfare reforms will have on people.

  The PAC report has found that despite the government tasking authorities to protect people with vulnerabilities however 133 councils offered no protection except to pensioners and war pensioners, reports Inside Housing.

  In nineteen local authority areas 225,000 people would lose more of their earnings than under the previous scheme. It found that some people were losing 97p of every pound they earned.

  Chair of the committee, Margaret Hodge, says: "This just goes to show, for some, work simply doesn't pay under the new scheme. For them, work incentives have actually weakened rather than strengthened - the opposite of what the government intended."

  Brandon Lewis, local government minister, said: "Spending on council tax benefit doubled under the last government costing taxpayers £4 billion a year - equivalent to almost £180 a year per household. That's why, as part of our long-term economic plan, we are fixing the welfare system to make work pay and reducing the deficit to safeguard our economy for the long term. Our council tax policies are working. Localised council tax support has also given councils stronger incentives to support local firms, cut fraud, promote local enterprise, get people into work and end the "something for nothing" culture."

  What do you think of this? Tweet us your comments @suppsolutions

  Image source: http://www.sxc.hu/photo/1435033

  By Laura Matthews

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