Back to all Motions

2016 National Women's Conference
14 October 2015
Carried as Amended

UNISON can be proud of the campaigning we have done to highlight and tackle the issue of in work poverty. The Worth It campaign took the message out to our communities and women members.

Under the Government’s austerity measures it has been women and their families who have borne the brunt of their policies and so called tax reforms. The latest attack is on working families’ tax credits and child tax credit. As a result of their proposals, 8 million families will be affected, placing further huge financial burdens on some of the lowest paid women workers, including many of our own women members. Working tax credits and child tax credits are designed to help low-paid workers and low-income families. Millions of women are dependent on both of these tax credits.

Working tax credits were introduced in 2003 by the Labour Government, and replaced similar benefits which had been in place since 1986. The working tax credit helps low paid workers the majority of whom are women. The average yearly payment is approximately £1,960.

Child tax credit is paid in addition to help with the cost of bringing up a family. Child tax credits are not dependent on claimants being in work. The basic child tax credit is £545 a year, but you can get up to £2,780 a child. Changes to this credit will mean that it will only be paid to the first two children in a family, and will apply to children born after 6 April 2017. If a woman stops claiming for more than 6 months, then goes back to earning a low wage, she will only be paid as if see had two children – because it counts as a ‘new claim’. The Government is also scrapping an extra ‘family element’ payment worth £545 for new families after April.2017.

At the moment, any household earning up to £6,420 a year earns the full amount of whatever tax credits they’re allowed to claim. People who earn more than that still get tax credits, but they’re whittled down as income rises. The threshold is being almost halved to £3,850 a year. The Government’s going to start taking away tax credits more quickly too. That means a family on a £5,000-a-year salary will no longer get the full amount.

The Government has announced that from April 2016 it will introduce a higher national minimum wage for over 25s of £7.20 per hour, a Living Wage, and that this will make up for the cuts to tax credits. This fails to recognise that tax credits cover both work and children, while the Living Wage will only benefit those in employment.

An independent body, The Institute for Fiscal Studies (IFS), says that 8.4 million households with one paid worker will lose on average £550 a year, even after the boost from the Living Wage. According to the Joseph Rowntree Foundation single parents will lose £80 a week. Only 25% of low paid women will benefit from the Living Wage. The Joseph Rowntree Foundation warned the damage done by the Chancellor’s brutal attack on in-work benefits will far outweigh his rise in the minimum wage. It warned that only 6% of low-income families – those with two parents working full-time on the minimum wage, will see a genuine boost in living standards from the higher rate. It has warned that, “Lone parents, even those working full time, and people who are searching for work face a decade of sharply-declining living standards.”

The IFS has stated that in-work benefits, such as working tax credits, are one of the most effective ways to help tackle in work poverty. The Tory policy of increasing the tax-free personal allowance has little impact over a worker’s lifetime. The report also found that nine out of ten pay more in tax than they claim in benefits. The IFS stated: “The lifetime poor spend the majority of their working lives in paid work. As a result, policymakers looking to target the lifetime poor might favour doing so through in-work benefits.” The IFS found when the Labour Government made tax credits and out-of-work benefits more generous, inequality fell. Over our lifetime, the report found increases in out-of-work and in-work benefits help to share wealth, but increasing the amount of pay we can take home tax-free had almost no impact at all.

Conference calls on the National Women’s Committee to:

• Campaign against the cuts to working tax credit and child tax credit that are having devastating impacts for women and our women members;

• Work within UNISON structures to continue to campaign for decent pay for our women members and to work towards ending in work poverty;

• Work to ensure that UNISON’s pay strategy incorporates the aspiration of our women members;

• Work with Labour Link to campaign for a fair and just tax system that tackles inequality and supports the most vulnerable.