Benefits Shake-Up 'To Cost Families Hundreds'

By Tadhg Enright, Sky Reporter

Changes to the welfare system will cost the average family £891 over the next year, according to research by Labour and the Institute for Fiscal Studies.

The Conservatives have responded by saying the biggest shake-up of the welfare state in history has already had an effect with a third of those claiming incapacity benefit giving it up to avoid a medical to prove their entitlement.

From Monday, millions of low income families will see an increase in their council tax bills.

The so-called bedroom tax will see extra charges levied on council house tenants with more bedrooms than they need.

And from next Saturday, the annual increase in tax credits and other working-age benefits will be cut to just 1%, well below the rate of inflation.

The personal income tax allowance for those aged under 65 will rise to £9,440 but the higher rate threshold will fall to £41,450.

Shadow chancellor Ed Balls says millions of families will lose out

The top rate of income tax will also fall from 50p to 45p which Labour claims will shave £100,000 off the annual tax bills of 13,000 people who earn more than £1m a year.

Shadow chancellor Ed Balls said: "These shocking figures show the huge hit millions of families are facing at the very same time as David Cameron and George Osborne are giving millionaires an average £100,000 tax cut.

"And while Ministers trumpet the small rise in the income tax personal allowance, they should admit that it is hugely outweighed by things like cuts to tax credits and child benefit, higher VAT, the bedroom tax and the granny tax.

"They are giving with one hand, but taking away much more with the other."

Mum-of-two Emma Kingsbury is one of 660,000 council house tenants who will have to pay the so-called "bedroom tax" because she only needs two of the three bedrooms in her home,

She told Sky News: "I've only ever needed two bedrooms and now, after placing us in this three bedroom when I didn't need or ask for it, they want us to pay for this room that we rarely use."

The bedroom tax will cost Emma and her boys £15 a week.

The 'bedroom tax' has prompted a number of protests

"The boys will have to stop some of their extra curricular activities, outings for Easter," she said.

"They haven't given anybody any time to try and downsize. I've had a month."

The Government insists it is vital to break the cycle of dependency on benefits and has claimed that welfare reforms have already succeeded in reducing spurious claims.

Out of 1.44 million medical assessments carried out on claimants of incapacity benefit, 837,000 were found to be fit enough to return to work.

A further 878,300 chose to give up their benefit instead of facing a medical to prove their entitlement.

Conservative party chairman Grant Shapps said: "Welfare makes up a third of this country's spending - so it's our job to make sure it's getting to the people who really need it.

"Our reforms are about freeing people from a system of dependency that's trapped them and their families for decades - and people are getting back into work as a result.

"These figures demonstrate how the welfare system was broken under Labour and why our reforms are so important."

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