6 August 2010
Some people diagnosed with serious illnesses like cancer will be much worse off in future if proposals hidden in last month’s Budget go ahead, Citizens Advice and Macmillan Cancer Support warned today.
Plans to change the way working tax credit is calculated will, in future, leave some people diagnosed with cancer or another serious illness up to £20 a week (over £1,000 a year) worse off and deny them hundreds of pounds in backdated payments at a time when they will have had a severe loss in earnings and need most support.
Tax credits are designed to give extra financial support to people on low incomes, including those who experience a sudden drop in income, for example some cancer patients who have to take extended periods of time off work to go through treatment. The government plans to change the system so that calculations for tax credits ignore £2500 of a household's loss in income - meaning they will in future get far less financial support in this situation. Backdating of tax credit claims will also be reduced from three months to just one month.
Citizens Advice and Macmillan warn that, if they go ahead, these cuts would lead to more debt problems and enormous additional anxiety for people who are seriously ill.
The two charities, who work in partnership to provide support and advice to cancer patients and their families, have written to Treasury ministers asking them to reconsider the proposed changes and take steps to ensure that people who are forced to take long periods of time off work because of serious illness such as cancer are protected.
They have worked out what the changes will mean for a number of typical clients, for example in the case of Mr & Mrs X, a couple in their 50s. Before cancer struck five years ago Mr X was in a full time job earning £20,000 a year and Mrs X worked part time, earning £5,000 a year. Mr X had to take nine months off work while he underwent intensive treatment. Although he was then able to return to work, the couple had faced a huge drop in income and used up most of their savings getting through this most difficult period.
Now Mr X has become ill again and has been told that the cancer has returned. He has had to stop work, and the couple’s income has dropped as his normal earnings have been replaced with statutory sick pay topped up by working tax credit. Their household income falls from £372 a week [after housing costs] to £202 a week. They are able to claim backdated tax credits of £406 which is very helpful in helping them adjust once again to a huge drop in income.
But if the same thing were to occur once the Budget changes kick in, their income would drop much further, to around £185 a week, and they would only be eligible for £86 in backdated tax credits.
Citizens Advice Chief Executive Gillian Guy said:
'Citizens Advice Bureaux see many people at such crisis points in their lives. We are therefore very aware of how hard it can be financially when they face such a drastic and unexpected drop in income at such a vulnerable point in their life. These changes will make an already very difficult situation much worse, inevitably leading to more debt problems and enormous additional stress and anxiety for people who are seriously ill, possibly setting back their chances of recovery.
'We were told that tax credits would only be cut for those on higher incomes, so it’s difficult to believe it was the government’s intention that these changes would hit such vulnerable people on low incomes so hard. That’s why we are appealing to government to look again at the likely impact and ensure that the safety net intended to support people through periods of very serious illness is not pulled away from under them.'
Ciarán Devane, Chief Executive at Macmillan Cancer Support, said:
'We strongly oppose planned changes to the way working tax credits are calculated. These cuts will further reduce the income of the poorest people living with cancer. Cancer patients rely on tax credits to help meet the extra costs they incur as a result of their cancer, such as higher fuel bills, clothing, travel and special diets. We urge the Government to think again about this unfair proposal.'
The two charities urge anyone with cancer, their family or friends to get free, confidential, independent advice and support by contacting their nearest Citizens Advice Bureau or Macmillan Cancer Support.
Citizens Advice and Macmillan have been working jointly to support people affected by cancer since January 2007. There are currently 68 Citizens Advice Bureaux providing a specialist welfare benefits advice service through this partnership for people affected by cancer.
For more information contact:
Moira Haynes Press Officer
020 7833 7107
0207 833 7078 or 0845 0990107 (out of hours)
Macmillan Cancer Support
Rebecca Openshaw, Media & PR Officer
020 7840 4699
Notes to editors:
Working Tax Credit (WTC) is a payment for people who are working and on a low income.
If the Government goes ahead with the changes, they will come into effect from April 2012
The Citizens Advice service
The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more information in England and Wales see www.citizensadvice.org.uk
The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
Citizens Advice Bureaux in England and Wales advised 2.1 million clients on 7.1 million problems from April 2009 to March 2010, an 18% increase on the previous year. For full 2009/2010 service statistics see: http://www.citizensadvice.org.uk/index/pressoffice/press_index/press_20100517.htm
Out of 22 national charities, the Citizens Advice service is ranked by the general public as being the most helpful, approachable, professional, informative, effective / cost effective, reputable and accountable. (nfpSynergy’s Brand Attributes survey, May 2010).
Most Citizens Advice service staff are trained volunteers, working at around 3,300 service outlets across England and Wales.
Volunteer hotline 08451 264264 (local rate)
About Macmillan Cancer Support
Macmillan Cancer Support improves the lives of people affected by cancer, providing practical, medical, emotional and financial support. Working alongside people affected by cancer, Macmillan works to improve cancer care.
For more information about Macmillan Cancer Support visit www.macmillan.org.uk or freephone 0808 808 00 00 for an information pack.