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21 July 2010
New TUC analysis published today reveals that at least half a million working families a year will lose more than £1,000 as a result of technical changes to tax credit allowances set out in last month's Emergency Budget.
Currently tax credit entitlements are calculated on a household's previous year's income. If a family's earnings fall during the course of a year - for example due to unemployment, illness, a family break up, retirement, bereavement or a household member losing working hours - their annual tax credit calculation is adjusted to take account of their new income.
However, changes announced in the June Budget mean that from 2012-13 households receiving tax credits who see their wages fall during the year will have the first £2,500 of income they lose disregarded when their new in-year tax credit entitlement is calculated.
For more information see the TUC website.
