Posted by Hari on Friday, March 25, 2016 with No comments | Labels: Austerity, benefits, Big Society, budget cuts, inequality, Labour, Osborne, taxation, Tories
Fee and KJ do the sums...
SOURCE GUARDIAN: Latest budget preserves income of wealthier households, while poorest could lose 12% of their income by 2019
Iain Duncan Smith resigned as the Tory work and pensions secretary on Friday, accusing chancellor George Osborne of delivering a “deeply unfair” budget that inflicted substantial reductions in disability benefits while offering tax cuts for the most affluent. Sustained benefit cuts will result in many households in the bottom 20% of earners losing up to 12% of their income by 2019, according to a report published on Monday by the influential Institute for Fiscal Studies (IFS). Meanwhile, households in the top half of income brackets will be no worse off and even the poorest pensioners will be 2% in the red at most. Paul Johnson, the director of the IFS, said: “Raising the threshold for paying higher-rate tax is clearly helping people in the middle- and upper-income brackets, while the cuts to benefits reduce the incomes of families on lower incomes.” He highlighted the switch from tax credits to universal credit as a major blow to working households at the bottom of the income scale. “Once universal credit is in place, the benefit system is much less generous,” he said. A chart in the report illustrating the impact of tax and benefit changes until the end of the current parliament shows the lowest 10% of households with children losing almost 10% of their income, while the next band lose more than 12%. The poorest 10% of pensioners lose 2% of their income; pensioners in the top 20% of earners gain or avoid losing any income at all.