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MPs approve cuts to tax credits

Wednesday 16th September 2015

Yesterday evening the House of Commons voted narrowly in favour of severe cuts to working tax credits.

These changes will come into effect in April 2016 and are estimated to affect around 150,000 working families with disabled children. It is claimed that these cuts will leave 3 million families worse off by £1,000 a year on average.

We're asking families to write to their MP to urge them to consider ways to mitigate the effects of these cuts when they come into place.

What do these cuts mean for working families with disabled children?

These cut will result in the following changes to the rules around tax credits:

  • A reduction in the earnings threshold for working tax credit; the annual amount that working parents can earn before their tax credit payments start to be reduced will be cut from £6,420 to £3,850. As a result any working family earning more than £3,850 will receive fewer tax credits from April.
  • An increase in the 'taper rate' at which tax credits are lost due to income. Currently for every £1 of income above the earnings threshold, tax credit payments are reduced by 41p. This rate will increased to 48p from April, meaning that low income families will lose tax credits at a faster rate as their incomes increase
  • A reduction in the income threshold for child tax credit from £16,105 to £12,125; this means that families who are not working or are working part-time will receive fewer tax credits if their annual income is above £12,125.

Thanks for tweeting your MP

Thank you to everybody who supported our Twitter campaign, calling for MPs to vote against these cuts to tax credits.

Whilst the cuts proposals were passed, we were able to provoke positive responses from several MPs and raise the profile of our concerns about this policy change.

Help us prevent the effects of tax credits cuts

It's still really important that we continue to demonstrate what the impact of these cuts will be for families of disabled children. Our focus is on mitigating these effects when the cuts come into place.

We're asking families to keep up the pressure on their MP, to keep our concerns about these cuts on the agenda and to encourage greater consideration of the effects of policy on families with disabled children.

You can write to your MP, adding personal comments about these cuts if you would like to, and ask them to stand up for families with disabled children over the next 5 years.