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| Benefits changes 'to hit 13m families' | |
| (34 minutes later) | |
| Thirteen million UK families will lose an average of £260 a year due to Budget changes to working-age benefits, says the Institute for Fiscal Studies (IFS). | |
| Tax credit changes could hit three million families, which are likely to lose an average of £1,000, it said. | |
| Even taking into account higher wages, people receiving tax credits would be "significantly worse off," said Paul Johnson, director of the IFS. | Even taking into account higher wages, people receiving tax credits would be "significantly worse off," said Paul Johnson, director of the IFS. |
| The chancellor said most workers would be better off under Budget changes. | The chancellor said most workers would be better off under Budget changes. |
| Taken together, the freeze in working age benefits and the changes to tax credits will affect 13m families, said Mr Johnson. | |
| But the reduction in the amount people can earn before being eligible for tax credits will cost three million families an average of £1,000 a year each. | |
| "It will reduce the incentive for the first earner in a family to enter work," said Mr Johnson. | |
| Tax credit changes | |
| From April 2016, anyone earning more than £3,850 a year will not be eligible for Working Tax Credit. Previously they could earn up to £6,420. | |
| From April 2017, new claimants for Child Tax Credit will not be able to claim for the third, or subsequent children. | |
| George Osborne said anyone working full-time on the National Minimum Wage - taking into account taxation changes - would be better off. | George Osborne said anyone working full-time on the National Minimum Wage - taking into account taxation changes - would be better off. |
| Speaking to the BBC, he said the changes amounted to a new contract with the country, which offered fewer benefits, but higher salaries. | Speaking to the BBC, he said the changes amounted to a new contract with the country, which offered fewer benefits, but higher salaries. |
| "This is a fair deal - because you've got to have a welfare system that's fair to the people who pay for it, as well as the people who need it," he told the BBC. | "This is a fair deal - because you've got to have a welfare system that's fair to the people who pay for it, as well as the people who need it," he told the BBC. |
| '£3,450 worse off' | |
| Earlier the Resolution Foundation - a think tank that campaigns for low and middle-income families - warned that the changes to tax credits could "weaken the incentive both to enter work, and earn more." | |
| Taking into account the new National Living Wage, which will boost the minimum wage to £9 a hour by 2020, the Resolution Foundation said many families will still lose out. | |
| According to its calculations, by 2020: | |
| However, it said some families moving on to Universal Credit, or applying for tax credits after April 2017 could face much bigger losses. | |
| For example, a low-earning couple with with three children making a new claim would be £3,450 worse off, following the tax and welfare changes set out in the budget. | |
| "We shouldn't think that a higher minimum wage will compensate all low income working families for their losses - many working households will be left significantly worse off," said Gavin Kelly, chief executive of the Resolution Foundation. | |
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