George Osborne's Benefit Cut Hurts Single Mothers The Most, Research Finds

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Families with children, particularly single mothers, are the biggest losers from George Osborne's Autumn Statement, according to research published by a think-tank.

Analysis of the chancellor's decision to impose a three year real-term cut to benefits by the Resolution Foundation reveals that the loses for single parents are more than ten times as large as for single people without children.

On average single parents stand to lose £330 of their 2011-12 income in their 2015-16 pay packet. A couple who have children and rely on childcare are set to lose on average £217 and a couple with children in which only one adult works will lose £122.

In his Autumn Statement this week Osborne announced a raid on welfare that will see most working age benefits including Job Seekers Allowance, Employment and Support Allowance and Income Support, Child Tax Credit and the Working Tax Credits rise below inflation at one per cent for three years.

Matthew Whittaker, Senior Economist at the Resolution Foundation said: "This latest squeeze on tax credits and benefits follows the pattern of previous announcement by hitting working families with children particularly hard.

"The losses for single parents are more than ten times as large as for single people without children. Although the new rise in the personal allowance will help some households, most low and middle income families will find its impact significantly outweighed by losses from welfare cuts.

"The decision to up-rate benefits and tax credits by one percent over three years ends up hitting low and middle income households twice as hard a one year freeze would have done.

"Under the government’s new numbers, the wage squeeze just got harder and the recovery now looks slower. Even by 2017, a typical worker on middle pay is now likely to have wages no higher than a middle worker at the turn of the millennium – nearly two lost decades of wage growth.”

The chancellor tried to mitigate the impact on low earners by announcing an increase the personal tax allowance, the amount of money workers can earn before they pay any income tax, by a further £235 in April 2013

He also said that the higher rate threshold of tax would increase by one per cent a year from April 2014, dragging more people in to the bracket.

However according to the Resolution Foundation the overall It shows that it is the poorest households who will suffer the most, with the bottom ten per cent of the population set to lose around £150 a year (in 2012-13 prices) in 2015-16.

Earlier analysis by the Resolution Foundation also debunked the idea that welfare cuts would target benefit 'scroungers' who did not have a job.

The think-tank found that that 60% of the impact of the proposed three-year, below-inflation rise in benefits will hit working households while only 40% will affect those where no one is in work.

"It’s completely wrong to say that today was all about helping so-called strivers," said the Foundation's chief executive Gavin Kelly said on Wednesday.

The chancellor's last Budget unravelled after critics took up arms against various tax changes including the infamous "pasty tax" and "granny tax".

Hoping to trigger similar outrage following the Autumn Statement, Labour has accused Osborne of bringing in a "mummy tax" as the benefit cut will affect maternity pay.

On Thursday Yvette Cooper MP, Labour’s shadow minister for women and equalities, said "new mums are paying a heavy price for George Osborne's economic failure".

"The chancellor tried to pretend yesterday that he was targeting what he characterised as the work-shy. But the truth is that he is hitting millions of working people and cutting £180 from new working mums who take maternity leave to care for their babies," she said.

"This real terms cut in maternity pay is effectively a £180 mummy tax on working women - and it's bad for the whole family. Evidence shows women on low income are less likely to take their full maternity leave because they can't afford to stay off work."