Changes to welfare could take £1bn out of the Welsh economy with the South Wales Valleys feeling the biggest impact Assembly members have been told.
Communities & Tackling Poverty Minister Huw Lewis claims Merthyr Tydfil, Blaenau Gwent, Neath Port Talbot, Rhondda Cynon Taff and Caerphilly will fall within the 25 worst affected local authorities in Great Britain.
He has highlighted research by the Welsh Government, the Institute for Fiscal Studies (IFS) and Sheffield Hallam University which claims benefit and tax credit cuts will hit Wales even harder than the UK as a whole due to its higher levels of welfare dependency.
It also warns that reform to Disability Living Allowance and Employment and Support Allowance Income could see some disabled people in Wales lose around £4,000 a year.
The Department of Work and Pensions says the Government is committed to supporting disabled people and spends around £50bn a year on disabled people and their services.
A spokesman said: "Hundreds of thousands of disabled adults and children will actually receive more support than now with the combined effect of benefit changes under Universal Credit."
Welfare reforms have come into force across Wales today that could reduce benefits and tax credits here by more than half a billion pounds in a year. Tens of thousands of people in Wales will be left out of pocket, with warnings that many are going to struggle to make ends meet.
The Minister for communities and tackling poverty, Huw Lewis, has described these changes as a "watershed moment." Megan Boot reports.
New research suggests the cost of the 2013 welfare reform could reach as high as £1bn per year in Wales.Read the full story ›
A report for the Welsh Government estimates that over 48,500 people in Wales have already lost an average of £9 a week as a result of the housing benefit reforms which came into effect in April 2011.
Now, with further reforms being implemented by the UK Government, more questions are being raised about just how much these latest changes will affect us here in Wales.
The charity 'Cuts Watch Cymru', believes that 250,000 people in Wales will be affected by changes to the housing benefit alone.
Despite the figures however, it seems that many of us are unclear about how these changes might affect us, and the reform has met a great deal of criticism for the way that it has been implemented.
If you’re young, old, sick, disabled or unemployed, the State benefits you receive will soon be changing.
But despite the UK Government's claims that these changes will result in a fairer system which will get more people back to work, new research suggests the cost to claimants in Wales could eventually reach a billion pounds a year.
Martin Oxborrow was a pilot with the RAF for 21 years. In 1997 he was discharged from the air force on medical grounds. He suffered from phobic anxiety disorder and was told he would not be able to work.
He now lives in Llandysul in West Wales. He still suffers from anxiety and depression.
“I have good days and bad days - I’m on the maximum dose of anti-depressants , I’m on some antipsychotic drugs to help and basically I have had an independent assessment that says I have treatment resistant depression" - Martin Oxborrow
Martin’s been claiming incapacity benefit for the past fifteen years and while he has always searched for work, his condition has restricted his ability even to attend an interview. Despite that, after an assessment in November, he was told that he was deemed capable of working again.
People suffering from long term illness used to be eligible for incapacity benefit. But the changes introduced by the UK government mean all claimants are now being reassessed to see if they are capable of work or eligible to claim a new benefit called Employment and Support Allowance.
Aberconwy MP Guto Bebb sat on the committee that drafted the welfare reforms. He believes the changes are crucial to safeguard the economy.
“The welfare reform bill is a huge bill and a significant change which was necessary because I don’t think the welfare system was working. We were spending more and more money on a system that was dysfunctional and I think the system as it stood was penalising people...
"...I think we need to have a welfare system which supports the weakest in society but make sure those people are able to work will be able to take jobs and be better off that they would be under the current system.” - Guto Bebb MP
The welfare system is on the verge of its biggest shake-up in 60 years, as the UK Government introduces what they refer to as a fairer system, which will get more people back to work.
But with new research suggesting the cost to claimants in Wales could eventually reach a billion pounds a year, many have raised questions about this so called, 'fairer system'.
Tonight, Wales This Week speaks to those who will be affected by these changes.
If you’re young, old, sick, disabled or unemployed, the State benefits you receive will soon be changing. The welfare system’s getting its biggest shake-up for 60 years - and new research suggests the cost to claimants in Wales could eventually reach a billion pounds a year.
Conservative MP for Montgomeryshire Glyn Davies has welcomed the debate on the current welfare system, saying there are issues that 'must be addressed'.
He explained: "A lot of people are very concerned because they're working hard, doing the right thing and paying tax.. and then somebody else is just living on benefits and not being prepared to work.
"There is a real issue there we've got to look at, and what David Cameron has done is begin a debate about this."
Plaid Cymru leader Leanne Wood says that the party is completely opposed to the introduction of regional benefit rates. She's claiming that it will institutionalise poverty in some areas of Wales.
The UK Government is working hard to create an anti benefits culture. But it makes no sense to cut support to people when there are so few jobs and opportunities available to them. I and my Plaid Cymru colleagues are seeing more and morer people coming to us for help because they have lost their benefits and introducing regional benefit levels will mean that even more people will struggle to cope in Wales. Introducing regional benefit levels would create low pay areas, institutionalise low ambition and punch a hole in the local economy.
She went on to call on the First Minister Carwyn Jones AM to protect the people of Wales from the proposals:
Today the civil service unions have been out on strike against job cuts. The PCS union has pointed out that tax evasion costs the UK £120 billion each year. Tackling this would be a much more effective exercise for the Government, but it seems that they are more interested in persecuting benefit claimants than the tax evaders among the elite.
How will Wales' First Minister make good his promise to protect the people of Wales from cuts to welfare provision? Too many people are already struggling in Wales yet Cameron's latest pronouncements threaten to push them harder.
Plaid Cymru's Hywel Williams MP has given his response to the Prime Minister's welfare reform comments:
David Cameron’s plans to cut housing benefits for young people under 25 are illogical and short-sighted.
Most young people getting help with sky high housing costs are actually in work. He says they should 'move back in with their parents'. How will this encourage young people to take work? And what if they have ‘got on their bikes’ and the family home is hundreds of miles away from their place of work?
Equally the Prime Minister’s pet project of regionalized benefits is plain barmy. This would further institutionalise poverty and create employment ghettos in which the existing lack of jobs, prospects and ambition would be intensified rather than addressed.