Around 4.3 million working families, including 40 per cent of all those with children, were receiving benefits or tax credits in 2012, according to a new think-tank analysis – contrary to the impression often given that 'making work pay' is the answer to controlling benefit spending.

The New Policy Institute analysis focuses mainly on payments of housing benefit (HB), council tax benefit (CTB) and working and child tax credits (WTC and CTC) to working families in 2012. It points out that there is no official estimate in this area. Simply adding up the numbers receiving each benefit in isolation would amount to double counting all those who receive more than one. The analysis instead derives estimates from a combination of administrative statistics on the total numbers receiving each of the benefits in isolation, and survey data from the Family Resources Survey and Households Below Average Income (FRS/HBAI).

Key points

• Some 4.3 million working families were receiving one or more of these benefits/tax credits in 2012.
• Just over 3.2 million working families were receiving tax credits. This was down by about 1,400,000 (almost one-third) compared with 2008. Most of this fall occurred in 2011 and 2012, due mainly to the abolition of the family-only element of child tax credit.
• 930,000 were receiving housing benefit. This had more than doubled over four years, up 490,000 since 2008.
• 790,000 were receiving council tax benefit, up 430,000 since 2008.
• Taking account of overlaps, it was estimated that, in addition to those receiving tax credits, a further 420,000 working families were receiving HB and/or CTB but not tax credits.
• On top of this, another 380,000 working families who got neither HB, CTB nor tax credits received disability living allowance (DLA). A further 270,000 working families who got neither HB, CTB, tax credits nor DLA did receive either employment and support allowance, jobseeker's allowance or income support.

Source: Peter Kenway, Working Families Receiving Benefits, New Policy Institute
Links: Report | NPI blog post