Almost 2 million of the poorest households pushed deeper into poverty by welfare cuts

Some 1.75 million households in Great Britain have seen their incomes cut in the last three years as a result of welfare reform, a report by Oxfam and the New Policy Institute (NPI) reveals.

The report, Multiple Cuts for the Poorest Families, warns that wide-ranging cuts are changing the shape of welfare support at a time when rising prices are making it harder for families to make ends meet. As a result, job seekers, carers, single parents or those with a disability or illness who are unable to work are being pushed deeper into poverty.

Some 300,000 households have seen a cut in housing benefit, 920,000 have seen a cut in council tax support and 480,000 have seen a cut in both.

In the last year alone, 400,000 households have been pushed further into poverty by cuts to housing benefit or council tax support – households affected by both of these cuts typically lose around £18 per week.

Mark Goldring, Oxfam Chief Executive, said: "This is the latest evidence of a perfect storm blowing massive holes in the safety net which is supposed to stop people falling further into poverty.

“We are already seeing people turning to food banks and struggling with rent, council tax, childcare and travel costs to job centres.  At a time when the five richest families in the UK have the same wealth as the bottom 20 percent of the population it is unacceptable that the poorest are paying such a heavy price."

The welfare state provides the very poorest households with a guaranteed income – made up of various benefits - to cover “normal day to day expenses”. Households also get help to pay for the unavoidable costs of council tax and rent. In the last two years the value of the guaranteed income has increased below inflation and cuts to council tax benefit and housing benefit mean that the poorest families have to use the cash-benefit to cover even more costs. This leaves them with less money for the other essentials such as food and fuel.

Tom MacInnes, Research Director at NPI and report author said: “There are two parts to the safety net. One is the means-tested cash benefit such as jobseeker’s allowance, which is rising by less than prices. The other is the benefits that help pay for specific unavoidable costs. This is where cuts have been targeted and where the greatest damage to the safety net is being done.”

Oxfam is calling on the Government to determine what the absolute minimum level of support should be for households in different circumstances. It must be high enough to mean that those reliant upon it are not forced to walk the breadline.