WIDER POLICIES
Commentary on Income Policy

The current restrictions on Working Tax Credit relating to age and hours worked should be removed.

The Working Tax Credit represents the first substantial Government policy to help those without dependent children whilst they are working.^[1]  It is an explicit acknowledgement that low income among working people without dependent children is a problem.  Current restrictions, however, mean that it is not yet available to either younger single people or single people working part-time.

The lack of any substantive data on the characteristics of low paid people means that it is not possible to quantify how many single homeless people these restrictions currently affect.  But. given that many working homeless people may often only be working part-time, due to their complex and often multiple needs, and that homelessness disproportionately affects young people - the numbers might be considerable.

The obvious conclusion is that there would be substantial benefits to many single homeless people if the eligibility criteria for the Working Tax Credit were made the same for single people as for families, namely by removing the restrictions relating to hours worked and age.

Given that Working Tax Credit is a new policy, it may well be that the Government will consider further changes to it over time, as it did with the family equivalent (Working Families Tax Credit) after the first few years.  Indeed, the Inland Revenue has indicated that possible modifications and extensions will be considered once the system has bedded in.

[1] Previous schemes, such as the Working Families Tax Credit, excluded those without dependent children. Back to text

Page last modified on 20/06/2006 at 15:47