Latest news with #poverty
The Sun
an hour ago
- Business
- The Sun
David Blunkett and Gordon Brown at war over the 2 child benefit cap as new stats suggest more kids falling into poverty
NEW Labour big beasts are at war over proposals to scrap the two-child benefit cap — as statistics suggest more youngsters are being plunged into poverty. In a bombshell intervention, ex-Home Secretar y David Blunkett today comes out against tearing up the welfare limit. 3 It puts him at loggerheads with former PM Gordon Brown, who branded the benefit cap cruel and is leading the charge to abolish it. Lord Blunkett's explosive comments come as Sir Keir Starmer is under huge pressure over the policy. An estimated 4.5million kids were living in relative poverty last year compared with 4.3million the year before, figures from the End Child Poverty coalition show. Furious Labour MPs are in open revolt over the two-child cap — which they want scrapped. Imposed in 2017, it stops parents claiming child tax credit or universal credit worth up to £3,455 per year for more than two children. Reform leader Nigel Farage fanned the flames last week by vowing to ditch it if he becomes PM. Downing Street accused him of 'fantasy economics' and said his £3.5billion spending pledge was unfunded. 3 But amid bitter rows inside the Government about it, Education Secretary Bridget Phillipson has said axing the cap is 'on the table'. Writing in today's The Sun on Sunday, Lord Blunkett said work, not handouts, is the best way to raise families out of poverty. He said: 'Surely having children that you cannot afford to feed is the legacy of a bygone era? 'The simple and obvious truth is that child poverty springs from the lack of income of the adults who care for them.' A decision on the cap is set for the autumn — with Chancellor Rachel Reeves expected to announce tax rises to pay for it if it is axed. Privately, Government figures believe the clear direction of travel is that it will be lifted. Adding to the pressure on No 10, figures shared exclusively with The Sun on Sunday suggest the number of children in poverty in Sir Keir's own constituency is soaring. Holborn and St Pancras in London had a rate of 47 per cent last year compared with 36.3 per cent the year before, the End Child Poverty coalition found. The group defines child poverty to be growing up in a household where income is 60 per cent below average. For a family of one adult and one child this is £263 a week and for a family of two adults and two children it is £547 a week. A slew of Labour Cabinet ministers represent seats with high levels of child poverty, the research found. Justice Secretary Shabana Mahmood's Birmingham Ladywood seat had the highest, at 61.9 per cent. Rachel Reeves represents a constituency where one in three kids are in poverty while Deputy PM Angela Rayner's seat has almost 40 per cent. The PM has promised to cut child poverty by the 2029 election. Axing the cap will cost about £3.5billion and would have to be funded by tax rises or even deeper cuts. Ditching it and a full U-turn on the winter fuel allowance would together cost £5billion. It is the same amount No 10 is trying to save with its cuts to disability and sickness benefits — being voted on later this month. Around 180,000 households not in work would get more cash, it said. While just 270,000 households in work — but on low wages — would benefit. 3 Lord Blunkett, while backing the cap, supports lifting it for parents who have disabled kids or multiple births — such as twins or triplets. The peer, who was brought up in grinding poverty in Sheffield, also called on the Government to 'come down like a ton of bricks' on absent fathers who do not pay for their kids. Tomorrow, more than 130 charities will call on Labour to axe the two-child policy in full. Dan Paskins, of Save the Children, said: 'A record number of children are now in poverty and this is under the noses of our MPs, particularly Cabinet members.' A Government spokeswoman said: 'We've already expanded free breakfast clubs, introduced a cap on cost of school uniforms, increased the national minimum wage for the lowest incomes, uprated benefits in April and supported 700,000 of the poorest families by introducing a Fair Repayment Rate on Universal Credit deductions.'
The Sun
2 hours ago
- Business
- The Sun
I grew up in poverty – but lifting the 2 child benefit cap for all families is not fair on taxpayers
AS KING Canute found over a thousand years ago, it is quite difficult to stand on a beach and order the tide to recede. Today, it is equally difficult to make the argument that giving families cash is not always the best way of lifting them out of poverty. 2 This is especially true when one particular measure becomes the symbol of whether or not you're on the right side of the debate about child poverty. But as someone who now can afford the comforts of life, I constantly remind myself of my childhood. The grinding poverty that I experienced when my father was killed in a work accident when I was 12 – leaving my mother, who had serious health problems, to fight a long battle for minimal compensation. Having only bread and dripping in the house was, by anyone's standards, a hallmark of absolute poverty. Why on earth would I question, therefore, the morality of reversing a Tory policy introduced eight years ago? This restricts the additional supplement to universal credit – worth over £3,000 a child per year – to just two children. I should know, my friends tell me, that the easiest and quickest way of overcoming the growth in child poverty is to restore the £3.5 billion pounds it would cost to give this additional money for all the children in every family entitled to the credit. It is true that the policy, introduced in 2017, failed its first test. Women did not stop having more than two children even when they were strapped for cash. It is still unclear why. After all, many people have to make a calculation as to how many children they can afford. 2 But one thing must be certain: namely, that if you give parents a relatively substantial additional amount of money for every child they have whilst entitled to benefits, they are likely to have more children. Nigel Farage, leader of Reform UK, said as much last week. His argument for restoring the benefit to the third and subsequent children was precisely that we needed to persuade low- income families to have more children. Surely having children that you cannot afford to feed is the legacy of a bygone era? All those earning below £60,000 are entitled to the basic c hild benefit, so the argument is about just over £60 a week extra per child. One difficulty in having a sensible debate about what really works in overcoming intergenerational poverty is the lack of reliable statistics. Some people have claimed, over recent days, that over 50 per cent of children in Manchester and Birmingham live in poverty. I fear that such claims should be treated with scepticism. Those struggling to make ends meet – sometimes having not just one but two jobs – who pay their taxes and national insurance and plan their lives around what can be afforded, have the right to question where their hard-earned wages go. The simple and obvious truth is that child poverty springs from the lack of income of the adults who care for them. Transforming their lives impacts directly on the children in their family. There is a limit to how much money taxpayers are willing to hand over to pay for another family's children. Helping them to help themselves is a different matter. So, what would I do? Firstly, I would ensure that families with a disabled youngster automatically have the entitlement restored. This would self-evidently apply also to multiple births. In both cases, life is not only more difficult, it is also harder to get and keep a job. I would come down like a ton of bricks on absent parents. My mum was a single parent because she was widowed; many others are single in the sense that the other partner has walked away. The Child Maintenance Service should step up efforts to identify and pursue absent parents who do not pay their fair share towards their child. We, the community, have a clear duty to support and assist those in need. To help those where a helping hand will restore them to independence and self-reliance. But there is an obligation on individuals as well as the State, and mutual help starts with individuals taking some responsibility for themselves. Finally, if (and this is where I am in full agreement with colleagues campaigning to dramatically reduce child poverty) we make substantial sums of money available to overcome hardship, then a comprehensive approach to supporting the families must surely be the best way to achieve this. As ever in politics there is a trade off. What you spend on handing over cash is not available to invest in public services: that is the reality. Help from the moment a child is born, not just with childcare but with nurturing and child development. Dedicated backing to gain skills and employment and to taper the withdrawal of help so that it genuinely becomes worthwhile having and keeping a job. A contract between the taxpayer and the individual or household. Government is about difficult choices, that is why Keir Starmer and his colleagues are agonising over what to do next.
Yahoo
9 hours ago
- Business
- Yahoo
Low-income Tennesseans get punished for making more money. Let's fix that.
Imagine that you are offered a promotion and raise at work. But there's just one catch: If you take it, you will move into a higher tax bracket. The bracket is so high, in fact, that you will actually end up with less take-home pay. What would you do? That's the exact situation in which many low-income Tennesseans find themselves. Someone trying to leave welfare for work is likely to run into a phenomenon known as a 'welfare cliff.' That is, the increase in work income can trigger a sudden loss of benefits, potentially leaving them financially worse-off, even when they earn more money. The loss of benefits operates similarly to a tax hike. Policymakers often debate marginal tax rates because high rates can reduce investment, entrepreneurship, and economic growth. But welfare cliffs can mean that, effectively, some of the highest marginal tax rates fall on low-income Americans trying to work their way out of poverty. In some cases, especially for those earning between 100% and 250% of the federal poverty level, the marginal tax can exceed 100%. That can discourage those people from pursuing work, marriage, education and other steps toward self-sufficiency. This is clearly a structural flaw in our approach to helping those in poverty. The purpose of welfare shouldn't be to simply help families endure poverty more comfortably, but to assist them in escaping it altogether. In a survey of Tennessee welfare recipients, 90% said that if they had financial assistance that would help them through a cliff, they would take a better-paying job even if it meant losing their benefits. Nearly 80% said they would work more hours, 77% said they would take a raise, and 69% said they would pursue additional education opportunities. Opinion: If Nashville is a welcoming city, why are so many of its residents struggling? The simplest and most effective way to deal with welfare cliffs would be for Tennessee to establish 'transitional benefits' to offset the loss in benefits that occurs as a recipient earns non-welfare income. Rather than an individual immediately losing benefits when their income reaches the eligibility threshold, benefits would be 'stepped down' in proportion to increases in non-welfare income. Fortunately, Tennessee policymakers are in a strong position to fix the problem. The state has more than $700 million in unused federal TANF funds that it must spend down, which would allow legislators to undertake large-scale welfare reforms without sacrificing other priorities. The state should devote a substantial portion of the available funds to addressing the benefits cliff problem. Moreover, the state has a template for reform. The Martha O'Brien Center has been managing a pilot program that combines transitional benefits with counseling for roughly 600 Tennessee families. The program has developed a web-based calculator that determines an appropriate transitional benefit based on the family's income, current benefits and family composition. Opinion: Nashville depends on low-wage workers. How do we ensure they can live here? The pilot is being monitored and evaluated by the Federal Reserve Bank of Atlanta among others. Although it is too early for hard data analysis, anecdotal reports suggest that the program is having a positive effect. The state legislature is reportedly working on potential solutions for some of the state's worst welfare cliffs, in particular, the state's low-income child care subsidy. By doing so, Tennessee will smooth the transition from welfare to work, leading to more earnings, more self-sufficiency, more innovation, and more efficiently spent welfare dollars. Michael Tanner is a Senior Fellow, Social Mobility, at the Foundation for Research on Equal Opportunity. This article originally appeared on Nashville Tennessean: Tennessee can curb welfare cliffs with transitional benefits | Opinion
Yahoo
9 hours ago
- Business
- Yahoo
47% of Florida households don't make enough to cover the basics — and a growing number are now 65 and up
A new report from the United Way's ALICE project reveals a troubling 47% of Florida households don't earn enough to cover basic living expenses. ALICE stands for 'asset-limited, income-constrained and employed' and refers to households that are above the poverty line but earn less than what the organization says is needed to afford the basics depending on household composition and location. This includes housing, child care, food, transportation, health care and technology, plus taxes and a contingency fund that equals 10% of a household's budget. Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how I'm 49 years old and have nothing saved for retirement — what should I do? Don't panic. Here are 5 of the easiest ways you can catch up (and fast) Nervous about the stock market in 2025? Find out how you can access this $1B private real estate fund (with as little as $10) The report, which focuses on data from 2023, says the average 'survival budget' in Florida ranged from $33,804 for a single adult up to $86,688 for a family of four with two adults and two children in child care. Of the state's nearly 9 million households, 13% lived below the federal poverty line while 34% were considered ALICE. The poverty line in 2023 was $14,580 for individuals and $30,000 for a family of four. In some areas, the 'survival budget' was much higher. Monroe County, for example, was among the most expensive places, with necessities costing single adults $45,948 and two adults with two kids in child care $106,608. The ALICE classification shines a spotlight on households who may earn too much to qualify for traditional aid programs but not enough to meet the rising cost of living. This includes Florida's senior households, which make up the largest portion of this group by age. 'More and more households 65 and older are now classified as ALICE,' Ernest Hooper, Chief Communications Officer at United Way Suncoast, told ABC Action News in a story published May 19. 'They're living paycheck to paycheck and not saving money.' That includes people like Leonora Gaspar, who's disabled and on a fixed income. She relies on organizations like Feeding Tampa Bay for some free meals. 'It helps a lot,' she told ABC Action News. 'The rent, it's more expensive.' Other residents in need pointed to skyrocketing food costs. 'I'm spending at least $300 to $400 just on food,' Felicia Acosta told ABC Action News. She says her husband died last year and she provides for her three grandchildren. Florida's high cost of living compounds the issue. As of May 9, ranked Florida's cost of living at 9.35% higher than the national average. Read more: Want an extra $1,300,000 when you retire? Dave Ramsey says — and that 'anyone' can do it Compared to other states, Florida's cost of living is on the higher end. For families struggling to close the gap, here are some practical steps: Call 211 for local help: United Way operates a free 211 hotline that connects people to local nonprofits, food assistance, childcare programs, rent relief and more. Apply for benefits: ALICE households may still qualify for support like SNAP, Medicaid for children or subsidized child care. Don't assume you're ineligible or that others need it more — these programs exist to help families. Revisit your housing options: If you're renting, consider renegotiating your lease or exploring income-based housing programs. Housing is often a family's single biggest expense — and the hardest to change — so start there. If possible, consider sharing housing with extended family or friends to reduce expenses. Cut food costs without sacrificing nutrition: Shop at local markets, consider bulk stores and use community food pantries as a supplement when needed. If you have children in public school, ask the school social worker about additional food and support programs. Build toward financial security: Even saving $10 or $20 a week in a high-yield savings account can provide a buffer. You can also track your spending and find areas to trim. Connect with mutual aid groups: Some neighborhoods have hyper-local support networks where community members share resources like gently used clothing, extra food, school supplies or household goods. Search online or on social media for a group near you. Here are 5 'must have' items that Americans (almost) always overpay for — and very quickly regret. How many are hurting you? Rich, young Americans are ditching the stormy stock market — here are the alternative assets they're banking on instead Robert Kiyosaki warns of a 'Greater Depression' coming to the US — with millions of Americans going poor. But he says these 2 'easy-money' assets will bring in 'great wealth'. How to get in now This is how American car dealers use the '4-square method' to make big profits off you — and how you can ensure you pay a fair price for all your vehicle costs Like what you read? Join 200,000+ readers and get the best of Moneywise straight to your inbox every week. This article provides information only and should not be construed as advice. It is provided without warranty of any kind. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The Sun
11 hours ago
- Business
- The Sun
Plans to lift two-child benefit cap will land UK's biggest jobless families with windfalls costing taxpayer £3.5bn
THE UK's biggest jobless families could receive a windfall of £3.5billion funded by the taxpayer if plans to lift the two-child benefit cap go ahead. Since 2017, parents have only been able to claim child tax credit and universal credit for their first two children, if they were born after April 2017. 3 3 An exception is made for children born as a result of rape. Now, Labour and Reform are both pushing to ditch the policy brought in by the Tories. The Labour party has long been divided over the issue, with Sir Keir Starmer ruling out scrapping the cap in 2023. However, on Thursday the PM hinted he's ready to heed the demands of Labour rebels and scrap the two-child benefit cap. Sir Keir gave his strongest indication yet that he will remove the threshold that limits handouts for a third kid. Analysis of official figures shows that ditching it would hand thousands of pounds a year in extra benefits to 180,000 large families in which no one goes out to work. But critics of the cap claim it has worsened child poverty. The hard-hitting rule, which slashes payments like Universal Credit and Child Tax Credit, is costing struggling households an average of £4,300 each, says a new report from the Institute for Fiscal Studies. Official figures from the Department for Work and Pensions (DWP) show a staggering 450,000 families were stung by the cap last year. Most of those hit - around 280,000 families – have three kids, while 120,000 have four, and 56,000 are raising five or more little ones. The DWP doesn't reveal exactly how much the biggest families are missing out on. However, separate stats from HMRC show child benefit - which isn't affected by the cap - is still being paid to some 15 families with a whopping 13 children or more. More than 16,000 families are getting child benefit for six kids, and over 5,000 are claiming for seven. Incredibly, nearly three in five of the families hit by the cap have at least one adult in work - proving that even grafting parents aren't safe from the squeeze. However, this leaves around 180,000 where no one in the household is in any kind of paid work. But former work and pensions secretary Esther McVey last night said the figures underlined the case for keeping the cap in place. She said: "Encouraging people to have children that they cannot afford themselves, and expecting others to pick up the tab for them, is financially and morally indefensible. "I expect nothing better from Labour, but it is a mistake for Nigel Farage to chase Labour to the Left." Laying the groundwork for a U-turn on his election claim the cap won't be abandoned, Sir Keir said earlier this week that he was 'determined to drive down child poverty'. Visiting a glass manufacturing plant in Warrington, on three occasions he wouldn't rule out a change in policy. Amid growing pressure from furious backbench MPs, Sir Keir insisted ministers were 'looking at all options' around tackling poverty among kids. And Nigel Farage raised eyebrows when he announced that a Reform-led government would ditch the cap completely. How many children does the cap affect? Then work and pensions secretary Iain Duncan Smith first proposed the policy in 2012 under the Conservative-Liberal Democrat coalition government. It was not until 2015 that then chancellor George Osborne announced a cap would be introduced from the 2017/2018 financial year. The coalition said it made the system fairer for taxpayers and ensured households on benefits faced the same financial choices around having children as those not on benefits. Government figures show one in nine children (1.6m) are impacted by the two-child limit. In the first three months Labour were in power, 10,000 children were pulled into poverty by the cap, the Child Poverty Action Group found. In May, it said another 109 children are pulled into poverty each day by the limit, adding to the 4.5 million already in poverty. The Resolution Foundation said the cap would increase the number of children in poverty to 4.8 million by the next election in 2029-30. Torsten Bell, the foundation's former chief executive and now a Labour Treasury minister, said scrapping the cap would lift 470,000 children out of poverty. 3
