Latest Public Sector News

03.09.15

Poorer homes to lose money with new wage ‘con trick’ – Unison

Thousands of low-income families will be progressively worse off from April despite the planned increase in the minimum wage, according to a report by Unison published yesterday (2 September).

The report shows that changes to tax credits will supersede the higher wages and personal tax allowances and leave families almost £2,000 worse off.

A family with two children working 35 hours a week on the national minimum wage will lose £1,615 a year, while they would have been £850 better had there been no changes to tax credit. Families with earner above the age of 25 will be similarly left without £1,277.

However, those under the age of 25 will be the hardest hit as they will not benefit from the wage increase.

Unison general secretary, Dave Prentis, said: “At first glance, low-paid workers might look quids in, but on closer inspection the chancellor is really rewarding them with an income cut. Many workers on the minimum wage will lose out as a result of the plans. It is dishonest for ministers to claim that people will be better off. They won’t.

“Any gain to families from the enhanced minimum wage and a higher personal tax allowance is going straight back to the treasury through the changes to tax credits. The chancellor’s pay con-trick will create chaos to household finances and plunge more families into poverty.”

Unison is urging MPs to oppose changes to tax credits threshold and taper that will be laid out in Parliament between September and January.

The national minimum wage is set to rise from £6.50 to £6.70 an hour in October, and to £7.20 in April for over 25s.

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