Poorer working families who get housing and council tax benefits will be just £​33 a year better off from the tax threshold rise - because as their income goes up, their benefits will go down.

For every person who is eligible to pay tax - but also gets council and housing tax benefit - the Department for Work and Pensions (DWP) will claw back £​187 of their £​220 annual gain. Essentially what the Government gives with one hand it takes with another.

Citizens Advice Chief Executive Gillian Guy said: "​The poorest working families will feel the Government has turned it'​s back on them - they needed this Budget to ease the pressure on their purse strings and make life easier. Instead they see high earners getting tax cuts.

"​Raising the personal tax allowance is an empty gesture to struggling families on low wages who get housing and council tax benefits. For these families, the weekly gain is less than the price of a loaf of bread;​ a measly 63p per week.

"​Not only has this Budget shunned the needs of the poorest working families - some face further hardship at the Government'​s hands with a cut of up to £​3,870 in their annual income thanks to changes in working tax credit, due in the next couple of weeks.

"​The Treasury'​s own figures show that the lowest income households lose more of their income from this Government'​s combined tax and benefit changes than nearly all of those higher up the income scale.

"​George Osborne has let these families down. To truly help poor working families the Government must ignore the extra £​4.23 a week (£​220 a year) income when calculating housing and council tax benefits - and delay the change to working tax credit until October 2013 when universal credit comes in."​

More from Citizens Advice.


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