Benefits Shake-Up 'To Cost Families Hundreds'

By Tadhg Enright, Sky Reporter

Changes to the welfare system will cost the average family £891 over the next year, according to research by Labour and the Institute for Fiscal Studies.

The Conservatives have responded by saying the biggest shake-up of the welfare state in history has already had an effect with a third of those claiming incapacity benefit giving it up to avoid a medical to prove their entitlement.

From Monday, millions of low income families will see an increase in their council tax bills.

Shadow chancellor Ed Balls says millions of families will lose out

The so-called bedroom "tax" will see housing benefit cut for council house tenants with more bedrooms than they need. Those with one spare room will be deducted 14% and those with more lose a quarter. 

And from next Saturday, the annual increase in tax credits and other working-age benefits will be cut to just 1%, well below the rate of inflation.

The personal income tax allowance for those aged under 65 will rise to £9,440 but the higher rate threshold will fall to £41,450.

The top rate of income tax will also fall from 50p to 45p which Labour claims will shave £100,000 off the annual tax bills of 13,000 people who earn more than £1m a year.

Shadow chancellor Ed Balls said: "These shocking figures show the huge hit millions of families are facing at the very same time as David Cameron and George Osborne are giving millionaires an average £100,000 tax cut.

"And while Ministers trumpet the small rise in the income tax personal allowance, they should admit that it is hugely outweighed by things like cuts to tax credits and child benefit, higher VAT, the bedroom tax and the granny tax.

"They are giving with one hand, but taking away much more with the other."

Mum-of-two Emma Kingsbury is one of 660,000 council house tenants who will have to pay the so-called bedroom tax because she needs only two of the three bedrooms in her home,

She told Sky News: "I've only ever needed two bedrooms and now, after placing us in this three bedroom when I didn't need or ask for it, they want us to pay for this room that we rarely use."

The bedroom tax will cost Emma and her boys £15 a week.

The 'bedroom tax' has prompted a number of protests

"The boys will have to stop some of their extra curricular activities, outings for Easter," she said.

"They haven't given anybody any time to try and downsize. I've had a month."

The Government insists it is vital to break the cycle of dependency on benefits and has claimed that welfare reforms have already succeeded in reducing spurious claims.

Out of 1.44 million medical assessments carried out on claimants of incapacity benefit, 837,000 were found to be fit enough to return to work.

A further 878,300 chose to give up their benefit instead of facing a medical to prove their entitlement.

Among them were people on benefits because of blisters, acne and sprains.

Conservative party chairman Grant Shapps said: "I think it's really important that we do have a system where people are supported in work and where when somebody works they know they are always going to be better off than on benefits.

"I think incapacity benefit and some of these other benefits were used by previous governments to ensure that people didn't sign on to the dole queue. In fact it was a very dishonest way of going about things.

"The great thing now is that people know they don't have to study the Jobcentre computer for an hour and a half, they know they when they go out to work they will always be better off working than on benefits. That's a good thing for them, it's a good thing for society."

Mr Shapps said that families often shared rooms in their homes and that his two sons did the same. It later emerged that Mr Shapps, who has three children, lives in a four bedroom house but uses one of the rooms as a study.

The Government reforms will cause queues at food banks to get longer and increase homelessness, according to charity Crisis.

It said the unemployed and disabled would bear the brunt of the cuts and that it had "serious concerns" about the replacement of

disability living allowance (DLA) with a  personal independence payment (PIP),

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