Alan Whitehead

Labour's Parliamentary Candidate for Southampton Test

  • Home /
  • News / Will families on the minimum wage be better or worse off by 2014?

Will families on the minimum wage be better or worse off by 2014?

Alan Whitehead MP is today publishing new research by Usdaw which looks at all of the Conservative Government's changes to tax and benefits, and assesses whether families in Southampton on the minimum wage are likely to be better or worse off after all these changes come into effect.

Alan Whitehead MP is today publishing new research by Usdaw which looks at all of the Conservative Government's changes to tax and benefits, and assesses whether families in Southampton on the minimum wage are likely to be better or worse off after all these changes come into effect.

The research shows:

  • A single person earning the minimum wage is £706 worse off
  • A family with one earner on the minimum wage and one child lose £991 
  • A couple, both earning the minimum wage, where one works full-time and one works part-time, who have 2 children are £1,197 worse off.

 

The calculations look at the Government's changes to tax and benefits going up until 2014.

Single Person, works Full Time (35 hours a week) on Minimum Wage

Year

Tax Saving

NIC Saving

Working Tax Credit Cut

VAT

Total

2011-12

+ 140

+ 100

- 212

- 235

- 207

2012-13

+ 190

+107

- 378

- 235

-  316

2013-14

+ 420

+ 107

- 475 *

- 235

- 183

Total

+ £ 750

+ £ 314

- £ 1,065

- £ 705

-  £ 706

 

Couple or Lone Parent with 1 Child & 1 Earner, Full-Time on Minimum Wage

Year

Tax Saving

NIC Saving

Child Tax Credit Rise

Working Tax Credit Cut

Child Benefit Freeze

VAT

Total

2011-12

+ 140

+ 100

+ 150

- 237

- 49

- 249

- 145

2012-13

+ 190

+107

+ 150

- 517

- 112

- 249

- 431

2013-14

+ 420

+ 107

+ 110

- 660 *

- 143

- 249

- 415

Total

+ £ 750

+ £ 314

+ £ 410

- £ 1,414

- £ 304

- £ 747

- £ 991

* Figures for Working Tax Credit were confirmed by the Treasury in answers to PQs 133778 – 133782, 18 Dec 2012, Col 688 (response to Ann Coffey MP)

 

Couple with 2 children.  One Parent works full-time (35 hours), one works part-time (20 hours) on Minimum Wage

Year

Tax Saving

NIC Saving

Child Tax Credit Rise

Working Tax Credit Cut

Child Benefit Freeze

VAT

Total

2011-12

+ 140

+ 129

+ 300

- 365

- 81

- 284

- 161

2012-13

+ 190

+ 117

+ 300

- 643

- 185

- 284

- 505

2013-14

+ 420

+ 113

+ 220

- 763

- 237

- 284

- 531

Total

+ £ 750

+ £ 359

+ £ 820

- £ 1,771

- £ 503

- £ 852

- £ 1,197

 

Other Cuts

These examples do not take into account the following cuts which also affect most families working full-time on the minimum wage:

  • Child Tax Credit for babies under 1 cut from April 2011 - £545 cut
  • Child Trust Fund cut from January 2011 - £250 cut
  • Health in Pregnancy Grant cut from January 2011 - £190 cut
  • EMA abolished in January 2011 – for children of minimum wage families it was a cut of £1,170, plus bonuses for attendance and progress
  • Childcare Tax Credit – cut from 80% to 70% in April 2011, average cut of £457 per child
  • Housing Benefit capped at 30% of market rates from October 2011 – average cut of £468
  • Bedroom tax in April 2013 – average loss of £728
  • Cuts to Council Tax Benefit with localisation in April 2013

The Labour Party will place cookies on your computer to help us make this website better.

Please read this to review the updates about which cookies we use and what information we collect on our site.

To find out more about these cookies, see our privacy notice. Use of this site confirms your acceptance of these cookies.