Chancellor of the Exchequer George Osbourne announced at the beginning of January that until 2016 he would limit increases on a series of benefits to below the national rate of inflation. On Jan. 21, the U.K. Parliament voted to limit public benefit increases and tax breaks to 1 percent each year.
Historically, benefits have risen in line with inflation and were due for a 2.2 percent rise in April, the BBC reported.
Women’s advocates are calling it a dangerous benefit squeeze and some ministers have said it will drive 200, 000 children and single parent families into poverty, The Times reported Jan. 18.
"Once again women are bearing the brunt of David Cameron's damaging policies and paying the price for this government's economic failure,” Labour Minister Yvette Cooper, said in a statement on Jan. 7. “George Osborne and David Cameron came up with real cuts to tax credits as a political stunt, whilst giving millionaires a tax cut.”
In December 2012, Conservative MP George Osborne announced that the top income tax rate for millionaires would be reduced to 45 percent from 50 percent in April 2013 the BBC reported.
A recent U.K. study found that 98 percent of those hit by the British Government’s 1 percent benefit limit and tax-credit freeze are women, The Guardian reported Jan. 6. They include those earning $77,700 or below and those with a partner earning $79,000 who stay home to look after children.
The research by the Commons Library showed that 4.6 million women across England, Wales, Scotland and Northern Ireland, who receive child tax credits directly, will be affected. That includes 2.5 million working women and more than 1 million women who care for children while their partners work.
New mothers on an annual income of approximately $19,000 are set to lose more than $2,000 during pregnancy and in the child’s first year as a result of decreases in maternity pay, pregnancy support and tax credits. They will also lose $670 from a reduction in child benefit over the same period.
Some tax-payers will be hit at year’s end, when they declare annual household earnings and find that the new measures affect their income brackets and require them to repay some of the benefits they received.
Families with one breadwinner earning less than $77,700 will be unaffected, the BBC reported. However, if the sole earner makes $79,000 or more they will keep a portion of the benefit they received in previous years but must repay 1 percent per $159 earned over $79,390. Similarly, if both parents are earning and one makes over the threshold they must either stop claiming or repay the full $1,752 through the tax charge. Families making over the threshold are being asked to elect either to declare it and receive less or no benefit for that year, or not declare it and be taxed the difference at the end of the financial year. If both parents are earning--but both earn below the threshold--neither will be affected, despite potentially earning up to $155,600 collectively.
The benefit cap is set to cripple the incomes of up to 300,000 nurses and 150,000 primary and nursery school teachers, professions notoriously dominated by women, The Guardian reported Jan 5.
A 2008 study conducted by the Nursing Midwifery Council found that about 89 percent of nurses are women and according to the BBC 88 percent of primary school teachers, 62 percent of secondary school teachers and 75 percent of new qualified teachers are women.
Matthew Reed, chief executive of The Children’s Society, said on Jan. 8: 'This bill will punish millions of children and families already struggling to make ends meet….Families already struggling to provide their children with food or a winter coat, or heat their homes are being pushed closer to the brink.”