Chancellor claims benefit changes will make work pay

The government has implemented several changes in April as it attempts to reign in spending and reduce borrowing.

These changes include a cut in housing benefits, a benefits cap and the introduction of universal credit. Several charities have voiced their opinion on the changes, saying they will hit the poorest of UK families the hardest.

However, government ministers have said the increase of the personal tax allowance, which has also been introduced this month, “will make work pay”.

The government is attempting to crack down on those who remain out of employment when they are fit to do a job. Bringing in the increased personal tax allowance, along with the benefit cap and other cuts will help do that, according to some MPs.

The government claims most families will benefit this week from the changes has been challenged by a leading thinktank the Resolution Foundation, which warned all new measures will be totally undermined by the introduction of the new universal credit.

The Foundation claims the majority of the benefit from raising the personal tax allowance will be taken back by welfare reductions under the universal credit initiative. It said the government is “giving with one hand, while taking away with another”.

Independent research by the Institute for Fiscal Studies shows the average family is £891 worse off this year as a result of all the governments changes since 2010. Other charities, such as the Joseph Rowntree Foundation, have expressed their concerns over the new measures being implemented this month.

As low earners struggle to make ends meet each month, these changes will put families under even more financial pressure. The situation is made even worse for those struggling with money. Many people are falling into credit card debt in order to pay for daily living costs; these changes by the government could make it more difficult to pay for everything and it is important for families to assess their finances for the year ahead.

By Joe White