Since 1997 the Government have introduced a number of policies to make work pay and help working families.
The working tax credit (WTC) provides financial support on top of earnings, and together with the national minimum wage (NMW) helps to improve work incentives and relieve in-work poverty. The child care element of WTC improves the financial rewards for parents from work, and gives them the financial flexibility to choose the child care arrangements that are most appropriate for their families. It offers low-to-moderate-income families support with up to 80 per cent. of child care costs up to a limit of £300 per week for two or more children. In addition, families in work are eligible for the child tax credit. Taken together, these policies mean that form October 2008, the guaranteed minimum income for a family with one child working full-time will be £292 a week.
The Government are committed to helping parents balance work and family life, including introducing enhanced maternity, paternity and adoption leave, the right for parents to request flexible working.
The Government are also trialing new ways of ensuring that work pays. From October 2008 the Government will pilot a new better off in work credit which will reassure long-term recipients of incapacity benefit (ESA on its introduction), income support, or jobseeker's allowance that if they enter full-time work they will have an in work income, including any in work benefits or tax credits, of at least £25 per week more than they receive from their out of work benefits.