A watershed budget that changes the landscape for Lone Parents: Belina Seminar report

This is the first of a series on blogs on issues that arose out of our Summer Afternoon Seminar

The 2015 Summer Budget was a watershed  that changed the tax and benefits landscape. The first conservative budget in 20 years had a clear ideological approach  over such a wide range of tax and benefit changes that it is exceptionally complicated to work out the difference it will make to each person, as they will be affected in different ways depending on the hours they work, their age, if they live in London, live in social housing, have one, two or more children or use childcare.

On the downside 

Freeze on Tax Credits and Child Benefit
Lower tax credit threshold and higher deduction rates
Lower benefits cap for the unemployed, even lower outside London
Need to be actively seeking work when their youngest child is aged 3.
Two child policy for tax credits and Universal Credit.
Continued conditionality on Universal Credit until they earn the equivalent of 35 hours at the minimum wage.
Loss of family premium on Housing

On the positive side 

£6.50 minimum wage in 2015 rising to a £9.00 living wage in 2020
Higher personal tax thresholds
Possibly lower housing costs if you live in social housing
Free 30 hours childcare for working parents of three and four year olds
Under Universal Credit childcare support starts from 1st hour and at 80%.

Our prediction is that parents will need to 

  • Lone parents will go back to work earlier
  • They will need to work for longer
  • Their opportunities to develop skills before they go back to work will diminish
  • The importance of in work support will increase

 

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