NEARLY half a million low-paid families will lose hundreds of pounds towards childcare costs.
The households will have their yearly handouts for nursery bills reduced by an average of £436.
Chancellor George Osborne has decided that from April anyone entitled to the Working Tax Credit will only be able to claim for 70% of their childcare costs instead of 80%.
People in cities will be hardest hit because of the high cost of nurseries.
Some 68,400 families in the North West will be affected, each losing an average of £421 a year. A study by the Resolution Foundation found that some families will be £1,300 worse off.
Campaigners believe the changes could force people out of work.
Gavin Kelly, from the Resolution Foundation, said: “For working mums on low or middle incomes, losses like these will be hard to bear.
“Many parents find support with childcare costs absolutely essential to staying in work. The big worry is some will now find that work doesn’t pay.
“With work costs such as train fares also rising, these cuts couldn’t come at a worse time for families.
“This was already set to be a tough year for families. With wages rising more slowly than inflation, households are going to get poorer – even before cuts are factored in.”
More than 450,000 homes receive the childcare element of the Working Tax Credit, which is paid to households with a joint income below £30,000.
By cutting the amount of support, Mr Osborne will save £270million next year, rising to £385million in 2014/15.
But a spokeswoman for Unison, the public sector union, said the ConDems were creating problems for the future.
She added: “The more you make it harder to stay in work, the more problems you build up.
“This is on top of a three-year pay freeze for public sector workers.
“People are going to struggle to make ends meet and they are going to find themselves in more debt.”
Lib Dem leader Nick Clegg was last year promising to extend free childcare and this latest change of heart could put him under greater pressure.
TUC general secretary Brendan Barber will warn today that ConDem cuts will spark more trouble in 2011.
In a New Year message, Mr Barber predicts widespread anger because of axed services and job losses. He says: “This is going to be a year when many people suffer but it could be the year when the campaign for change really gets going.”
Mr Barber will add that the nation’s sense of fairness could be so offended that the country could rise in opposition like it did against the Poll Tax 20 years ago.