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Budget: Poorer families just £33 better off

Budget: Poorer families just £33 better off

Category: Money

Updated: 22/03/2012
First Published: 22/03/2012

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Poorer working families could be just more than £30 a year better off after yesterday's Budget – despite the increase in the personal allowance, it is claimed.

Chancellor George Osborne labelled yesterday's address as a 'working Budget' that rewards work, but Citizens Advice says poorer working families could find their income boosted by just £33 a year - £2.75 a month.

This is despite the headline initiative announced by Mr Osborne that the personal allowance – the amount people will earn before they are taxed – is to rise to £9,205 from April 2013.

The Chancellor said that it would mean people are £220 a year better off but the charity says that for every person who is eligible to pay tax - but also gets council and housing tax benefit - the Department for Work and Pensions will claw back £187 of their £220 annual gain – 'giving with one hand and taking with another'.

Citizens Advice chief executive Gillian Guy said that the poorest families will feel that 'the Government has turned its back on them'.

"Raising the personal tax allowance is an empty gesture to struggling families on low wages who get housing and council tax benefits. For these families, the weekly gain is less than the price of a loaf of bread; a measly 63p per week," he added.

"Not only has this Budget shunned the needs of the poorest working families - some face further hardship at the Government's hands with a cut of up to £3,870 in their annual income thanks to changes in working tax credit, due in the next couple of weeks.

"The Treasury's own figures show that the lowest income households lose more of their income from this Government's combined tax and benefit changes than nearly all of those higher up the income scale."

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