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Published by Scottish Council for Voluntary Organisations

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Welfare safety net is failing

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​Oxfam report shows how poor families are struggling to cope with less cash as prices rise

Wide-ranging cuts are changing the shape of welfare support at a time when rising prices are making it harder for families to make ends meet.

A new report by Oxfam and the New Policy Institute (NPI) shows 82,000 of the poorest families in Scotland have seen their incomes cut over the past three years.

The majority of cuts in Scotland have been related to housing benefits, with 54,000 households affected by the bedroom tax, 27,000 households seeing a reduction in the limits on local housing allowance (LHA) and 1,000 households affected by the overall benefit cap.

It is unacceptable that the poorest are paying such a heavy price - Jamie Livingstone

While the welfare state provides the very poorest households with a guaranteed income to cover normal day-to-day expenses, the report shows that in the last two years the value of that income has risen below inflation.

And cuts to council tax benefit and housing benefit mean that the poorest families are hit hardest, leaving them with less money for essentials such as food and energy.

The impact of the cuts has been to some extent mitigated by the Scottish Government, which recently announced plans to effectively abolish the bedroom tax by providing money to offset the reform through the discretionary housing fund.

However, Oxfam is now calling on the UK government to determine what the absolute minimum level of support should be for households.

Oxfam says government support for families must be high enough to ensure those reliant upon it are not on the breadline.

Jamie Livingstone, head of Oxfam Scotland, said it was little wonder people were turning to food banks in deeply worrying numbers, with others struggling with rent, council tax and childcare.

“At a time when the five richest families in the UK have the same wealth as the bottom 20% of the population it is unacceptable that the poorest are paying such a heavy price.”

Across the UK a total of 300,000 households have seen a cut in housing benefit, 920,000 have seen a cut in council tax support and 480,000 have seen a cut in both.

In the last year alone, 400,000 households have been pushed further into poverty by cuts to housing benefit or council tax support.

Households affected by both of these cuts typically lose around £18 per week.

Tom MacInnes, research director at NPI and the report’s author, said welfare was a safety net that was now failing.

He said: "They’re are two parts to the safety net. One is the means-tested cash benefit such as jobseeker’s allowance, which is rising by less than prices.The other is the benefits that help pay for specific unavoidable costs.

"This is where cuts have been targeted and where the greatest damage to the safety net is being done.”