Analysis for the Guardian finds changes due on 6 April will also wipe thousands off payments for bereaved families
A government shakeup of welfare payments being introduced on Thursday will push a quarter of a million children into poverty while wiping thousands of pounds off payments for bereaved families, according to research.
Analysis for the Guardian reveals that a family whose third child is born before midnight on Wednesday could be up to £50,000 better off over 18 years than one whose child is born on Thursday.
Meanwhile, a terminally ill man has told the Guardian that his wife and children will see tens of thousands of pounds wiped off their bereavement benefits if he survives beyond this week’s welfare deadline.
The man, from Barnet in north London, who spoke under the pseudonym Alan in order to protect his family, hit out at the “callous and brutal” reforms that will limit payments to widowed parents from many years to a maximum of 18 months.
The crunch for families celebrating a new birth or grieving the loss of a parent is a result of changes coming into effect on 6 April. They were announced when George Osborne was chancellor and are being enacted by Theresa May’s government. One of the changes means all households that have a third or subsequent baby will – aside from a limited set of exemptions – no longer be able to claim child tax credits.
Policy in Practice found that more than 600,000 families – championed as the “just about managing” households, which the prime minister vowed to protect on her first day in government – would be hit by the child welfare cuts, while many more could be affected by other cuts.
An expected 8,000 third or additional children are expected to miss out on support of up to £2,780 a year in April, a figure that could climb to 104,000 over the next 12 months, said the authors of the study.
The two-child restriction would inflate current child poverty figures by 10% by the end of the parliament, the study predicts, with a knock-on cost to public services of around £270m a year as a result of increased support spending in other areas such as housing and schools.
“The impact of growing up in a family that struggles to provide basic necessities will mean this policy is likely to have financial and social consequences well into the future,” said Deven Ghelani, director of Policy in Practice.
Osborne announced the two-child policy in 2015 as part of a £12bn programme of social security cuts. It is expected to save £1bn a year for the Treasury by 2021. Also coming this week is a freeze to working age benefit levels, at a time when, according to the Resolution Foundation, the wealthiest will benefit from over £2bn a year in income tax cuts.
Families with children in which one parent dies are currently eligible for a £2,000 lump sum followed by a taxable benefit of approximately £112 a week until the youngest child leaves full-time education, which can stretch over 20 years.
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