Two million poorest families hit by welfare reforms, says Oxfam

Nearly two million of the poorest families in Britain have been made poorer by a “perfect storm” of below-inflation benefit rises and changes to the welfare system, a new report warns.

An analysis by Oxfam and the New Policy Institute found the worst-affected 200,000 families were losing £864 a year as a result of benefit cuts.

It concluded that about 1.75 million households had been hit by one or more changes to welfare payments, including fewer council tax exemptions and the “bedroom tax”.

The charity called on the Government to introduce an “absolute minimum” level of financial support regardless of where people lived, which would be “high enough to prevent people from having to walk the breadline”.

The report highlighted four changes to the welfare system that it blamed for the falling living standards. It said 500,000 people were having their housing benefit cut by an average of £14.40 per week because they lived in a home with a “spare” room. A further 790,000 have lost money as a result of the lowering of the limit on local housing allowance payments to people renting privately rather than living in social housing.

Others have been affected by the introduction of a £500-per-week benefit cap, while the replacement of the council tax exemption means 1.4 million families become eligible to pay the tax for the first time since 2013, having previously been deemed too poor. Tom MacInnes, research director at the New Policy Institute and the report’s author, said the changes were particularly harsh because they affected costs which could not be controlled.

“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.”

Mark Goldring, Oxfam’s chief executive, said the report provided 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 jobcentres,” he said. “It is unacceptable the poorest are paying such a heavy price.”

But the Department for Work and Pensions rejected the claims. “Britain has a strong welfare state, but for too long the system trapped those it was designed to help in a state of dependency,” said a spokesman. “Work is the best route out of poverty so we’re making sure it pays to work and supporting people into employment – with an extra 1.5 million people in work since 2010.

“Our reforms are specifically designed to improve the lives of the poorest in our society.”