Experts have warned against British government’s plans to cut tax credits and other working-age benefits, saying they will be “extremely unfair” on low-income households.
The Tory government is set to enforce £12bn of welfare cuts. Prime Minister David Cameron insists that tax credits should be replaced by higher wages.
But critics say the move can negatively affect low-income families.
The composition of the cuts “looks set to be extremely unfair on the working-age population,” Mark Littlewood, director general of the Institute of Economic Affairs, was quoted as saying by the Guardian.
“Whilst important for getting cash to relatively poor families, tax credits discourage people from earning more money by creating high effective marginal tax rates, leading to bunching around part-time work hours. They could be reformed in a way which encourages full-time work. But simply salami-slicing the value of tax credits will hit certain households hard without creating this positive dynamic,” he reiterated.