Coalition tax and benefit changes have left families nearly £900 a year worse off on average, Labour said as it stepped up attacks on a raft of welfare reforms.
A significant squeeze on state help starts to bite, with thousands joining protests across the UK on Saturday against the so-called “bedroom tax”.
Charities say they are braced for a period of “misery” and increased homelessness for the poorest families and the disabled as the austerity measures kick in.
But ministers say tackling the spiralling welfare bill is a vital part of the Government’s deficit-reduction strategy.
Work and Pensions Secretary Iain Duncan Smith insisted that even with the tough measures, the overall cost to the taxpayer continued to rise.
“The reality is that this country is not cutting welfare, it is managing the growth at a lower level,” he said.
Shadow chancellor Ed Balls said households faced a “shocking” cut at the same time as the top rate of income tax was reduced from 50p to 45p.
Institute for Fiscal Studies figures showed a £9.93 boost from this year’s Budget was far outweighed by a £901 annual hit from previously announced measures, he said.
Around 660,000 social housing tenants deemed to have a spare bedroom face losing an average £14 a week. Council tax benefit is also replaced today by a new system run by local authorities but with 10% less funding.
Anti-poverty campaigners say around 2.4 million poor families face an average £138 a year rise in their bills.
The chief executive of homelessness charity Crisis, Leslie Morphy, said: “The result will be misery cold rooms, longer queues at food banks, broken families, missed rent payments and yet more people facing homelessness devastating for those directly affected, but bad for us all.”