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Tax credits and in-work poverty in the UK: An analysis of income packages and anti-poverty performance

Hick, Rod ORCID: and Lanau, A. 2019. Tax credits and in-work poverty in the UK: An analysis of income packages and anti-poverty performance. Social Policy and Society 18 (2) , pp. 219-236. 10.1017/S1474746418000118

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This paper 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.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Social Sciences (Includes Criminology and Education)
Subjects: H Social Sciences > HJ Public Finance
H Social Sciences > HN Social history and conditions. Social problems. Social reform
Publisher: Cambridge University Press (CUP)
ISSN: 1474-7464
Funders: Nuffield Foundation
Date of First Compliant Deposit: 8 May 2018
Date of Acceptance: 15 March 2018
Last Modified: 06 Nov 2023 22:05

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