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Tax Credits and In-Work Poverty in the UK: An Analysis of Income Packages and Anti-Poverty Performance

Research output: Contribution to journalArticle

  • Rod Hick
  • Alba Lanau
Original languageEnglish
Number of pages18
JournalSocial Policy and Society
Early online date11 May 2018
DOIs
DateAccepted/In press - 15 Mar 2018
DateE-pub ahead of print (current) - 11 May 2018

Abstract

This article examines the relationship between tax credits and in-work poverty, drawing on the findings from a major national study on in-work poverty. We present an analysis of (i) the income packages of working families and (ii) the performance of tax credits in relation to anti-poverty objectives, drawing on data from the Households Below Average Income survey between 2004/5 and 2014/15. Our study generates five novel findings, including that tax credits reduce the poverty gap of recipient households by two-thirds; that tax credit cuts post-2010/11 have served to focus payments on single parent families and households with greater numbers of children; and that tax credits make up just one third of the social security income of working households. We argue that understanding in greater depth the interaction between tax credits and income adequacy amongst working families is necessary to provide a firmer foundation for an effective assault on in-work poverty.

    Research areas

  • In-work poverty, poverty, social security, tax credits

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  • Full-text PDF (accepted author manuscript)

    Rights statement: This is the author accepted manuscript (AAM). The final published version (version of record) is available online via Cambridge University Press at https://www.cambridge.org/core/journals/social-policy-and-society/article/tax-credits-and-inwork-poverty-in-the-uk-an-analysis-of-income-packages-and-antipoverty-performance/E62288C1753002BEC7AE1D788940F2BC . Please refer to any applicable terms of use of the publisher.

    Accepted author manuscript, 427 KB, PDF document

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