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Tax credit cuts to hit more than 120,000 households in north

More than 120,000 households in the north will be affected by tax credit cuts to be introduced in April

MORE than 120,000 households in the north will lose an average of around £900 a year after changes to tax credits are introduced in April.

Changes announced in Westminster's July budget mean that the threshold at which payments start to reduce will be lowered.

According to figures released by the Department for Social Development yesterday, households affected by the change will lose £918 a year on average - around £17.60 a week.

Around 121,000 households who receive tax credits will be affected once the income threshold is reduced to £3,850.

The cuts are part of welfare changes announced in British Chancellor George Osborne's July budget.

Most of the latest reforms, including changes to tax credits, will be introduced automatically next year because they are "reserved matters" and can be implemented without the assembly's approval.

But some of the key changes, including a further reduction in the benefits cap, are devolved matters and will require agreement at the assembly.

The north's main parties are currently locked in talks to resolve a crisis over welfare reform and continued paramilitary activity.

But with Sinn Féin and the DUP already at odds over benefit changes announced in 2012, politicians have the added task of reaching agreement on fresh cuts announced in July.

At the end of last year, it seemed likely that agreement would be reached on the 2012 welfare changes. But Sinn Féin later raised concerns that plans to protect the most vulnerable fell "well short" of what they had expected and refused to agree the changes.

Figures released by the department now show the scale of the latest welfare cutbacks.

The July cuts will take more than £200m from the north's welfare bill in the next financial year, but Stormont will have to cover some of that saving if they are not implemented.

The figures show failure to introduce the £20,000 benefits cap will cost the Executive £7m a year alone.

The assembly is already paying harsh penalties because the parties could not agree the introduction of 2012 measures including a welfare cap, the reform of Disability Living Allowance (DLA) and the spare room subsidy, also known as the bedroom tax.

But the fines will dramatically increase if Stormont does not agree to the introduction of universal credit - a measure aimed at simplifying the benefits system - meaning that essential services including health and education, which are already under severe pressure, are likely to be hit by further cuts.

SDLP assembly member Dolores Kelly MLA has said that the impact of tax credit cuts in Northern Ireland will devastate families.

"There are thousands of parents doing their best to give their children a basic standard of life on a shoe string budget," she said.

"To cut such a significant sum from low income households will shunt countless families further into poverty and leave thousands destitute."

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