Claire

Claire is a single mother with two children. Her son is 17 and is at college; her daughter is three and attends a nursery while Claire is at work. She works for 32.5 hours a week and earns £28,000. Her case is shown in Table 3.

• Wage and price trends mean that her real earnings are set to fall by £1,150 a year in 2011-12, and by a further £131 in 2012-13.

• Tax and benefit changes coming into effect in 2011-12 will reduce her income by a further £1,260 a year in real terms. Changes in 2012-13 will reduce her income by a further £79, leaving her £1,339 down on 2010-11.

• Her income tax and National Insurance bill will fall by £409 in 2011-12 and by a further £144 in 2012-13 (thanks in part to a £39 reduction associated with the Budget 2011 measures).

• In contrast, she will face a £1,488 reduction in WTC in 2011-12 in real terms – driven primarily by the reduced generosity of the childcare element – and a further cut of £263 in 2012-13.

• Her CTC award will increase by £229 in 2011-12 and a further £147 in 2012-13 because of increases in the child element, but these gains will be offset by the freeze in Child Benefit and by the scrapping of the Education Maintenance Allowance for her son.

Compared to 2010-11, her household will be £2,410 (-7.5 per cent) poorer in 2011-12 in real terms in total and £2,620 (-8.4 per cent) worse-off in 2012-13.

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