Couples in parts of Manchester could face losing around £4,000 a year from April onwards, after a change in tax credit rules by the government.
Taken as a snapshot, around 165 couples who have children and are in part-time work in Denton and Reddish face the loss as further financial hardship hits the Manchester area.
The tax change means that couples who have children, and earn less than around £17,700 per year will need to increase their working hours from a minimum of 16 to 24 hours per week or they will lose all their working tax credit of £3,870 per year.
Andrew Gwynne, Labour MP for Denton and Reddish, is urging the government to reconsider the change.
He said: “This is a deeply unfair change from a government that is increasingly out of touch with parents feeling the squeeze and struggling to juggle work and family life.
“It tells you everything you need to know about David Cameron and George Osborne that while the banks are getting a tax cut this year they are making life harder for parents in the squeezed middle who are working and trying to do the right thing.
The figures in Denton and Reddish only tell half the story, with a nationwide total of 212,000 households set to lose out as a result of the new tax credit rules.
Recent surveys have found that one in five organisations have cut down on the number of hours that people work due to the state of the economy, with just 6 per cent increasing them, making it even more difficult for people to increase their hours in order to avoid these losses.
Mr Gwynne added: “In this climate, very few people in part-time work will be able to increase their hours by up to 50 per cent at the moment.
“And for a couple with children losing around £4,000 a year from this change, going out to work makes no sense.
“This tax credits bombshell is now just a few weeks away. For many families here in Denton and Reddish it means going out to work won’t pay and they’ll be better off on benefits. That makes no economic sense at all. The government urgently needs to think again.”