Cuts to tax credits could leave over half of families in Caerphilly County Borough struggling, a leading children’s charity has warned.
In his budget on July 8, Chancellor George Osborne announced plans to restrict tax credits payments which are paid to families on low income, to two children.
Universal Credit payments will also be limited to two children, while tax credits and working-age benefits will be frozen for four years.
The chancellor will also reduce the income families must earn to be eligible for tax credits and universal credit.
Fifty-eight percent of families in Caerphilly County Borough have children in receipt of tax credit, with 24,900 children dependent upon it.
Charity Barnardo’s Cymru had urged the government not to cut the “lifeline” benefit as part of plans to save £12bn from the welfare budget.
Barnardo’s Cymru Director, Yvonne Rodgers, said: “Without this income, many parents could not afford their weekly food shopping let alone school uniforms and books. With low wages and high living costs stretching budgets across Wales, tax credits are an everyday lifeline for families in Wales.
“Families would be better off if the government focused on tackling low wages and high childcare costs, instead of cutting struggling families’ income.”
Mr Osborne also cut the benefits cap, the total amount a household can receive in benefits, from £26,000 to £20,000 and stop most 18 to 21-year-olds from being able to claim housing benefit.
Elsewhere the Chancellor scrapped maintenance grants for students from low income families, reduced corporation tax to 18% and froze public sector pay rises at 1%, regardless of inflation, for the next four years.
He committed to a compulsory £9 living wage by 2020 and raised the inheritance tax threshold to £1m for married couples.
Caerphilly MP Wayne David denounced the budget.
He said: “It’s a cleverly presented budget but the devil is in the detail and behind all the smoke and mirrors ordinary people are worse off.”
Mr Osborne labelled his plans a “one nation” budget and said the Greek crisis showed “if a country’s not in control of its borrowing, the borrowing takes control of the country”.
He said: “Britain still spends too much, borrows too much, and our weak productivity shows we don’t train enough or build enough or invest enough.”
Harriet Harman, acting labour leader, said: “The Chancellor is said to be liberated without the ties of coalition holding him back but what we have heard today suggests his rhetoric is liberated from reality.
“A budget for working people? How can you make that claim when you are making working people worse off.
“You are making working people worse off by cutting tax credits and scrapping grants for the poorest students.”