FAMILIES across the Capital are facing a £780 cut to their annual income following a shake-up of the benefits system, new research has revealed.
Welfare reforms being brought in at Westminster are set to suck £130 million out of the city’s economy – equivalent to £390 for every working-age adult.
The study – produced by experts at Sheffield Hallam University – reveals parents collecting child benefit are most likely to see cuts in their payments while those on incapacity benefit will see the steepest yearly reductions of up to £145.
Ministers are introducing a swathe of changes aimed at driving down Britain’s welfare bill including combining means-tested allowances into a single payment – the “universal credit” – and capping rises to most working-age benefits at one per cent.
And it has emerged that some of Edinburgh’s poorest areas will suffer the most.
The average family in Craigmillar – the worst-hit neighbourhood in Edinburgh – will lose out on £1240 per year once the full range of reforms are introduced.
But significant losses will be felt even in the city’s most affluent districts, with each family in the Meadows-Morningside ward set to shoulder an average annual hit of £440.
The findings have sparked anger among anti-cuts campaigners who claim hard-pressed families have already been forced to use food banks and spend their life savings to survive.
Increases in alcohol and drug abuse have also become apparent, they warned.
Community activist Wendy Walton, member of Greater Leith Against The Cuts, called the welfare changes “profiteering” and claimed the effects would be particularly damaging in Leith, where the average family will see their income fall by £1000 a year.
She said: “On paper, the welfare reforms look good but in reality, particularly here in Leith, there’s only a tiny number of jobs. There’s not enough to go around.
“These reductions will have a serious impact on the living standards of people – and those already living in serious poverty. It’s the impact on people’s psychology – depression, people turning to alcohol, drugs and so on.
“The way the rules go is quite severe and target-driven – they’re not about enabling a disabled person to enter the world of work. It’s about saving money.”
Political leaders said the findings of the research echoed what they saw day-to-day.
Councillor Maureen Child, Labour member for Portobello and Craigmillar, said the impact of reforms would be made worse by rises in the cost of living.
“I’ve seen people hit by the bedroom tax, where social housing tenants with spare bedrooms have their benefits cut, and people hit by loss of income,” she said.
“I probably see the tip of an iceberg. People are finding it a real struggle to make ends meet, feed their kids and pay the rent. The number of people in rent arrears has sky-rocketed.”
But the reforms have been defended by ministers at Westminster, who said they were about providing “new purpose”.
Prime Minister David Cameron previously said: “They are about giving new purpose, new opportunity, new hope – and yes, new responsibility to people who had previously been written off with no chance.”