Before things changed, Nikki and her family were what you might call “comfortable”. Her husband, Ian, worked in sales for a phone company and Nikki as a pattern cutter and grader for high-end high street stores, taking in a joint income of £60,000. Soon their family grew to five: with a son, Lennon, the eldest child, and two little girls. Then Lennon got sick, with a long list of complex, undiagnosed disabilities, blindness, hearing loss, and eventually multi-organ failure, and both had to quit work to take on caring as their new full-time jobs. “Our little soldier,” Nikki, 37, calls him.

A patchwork of social security helped the family get by: from housing benefit to help paying the rent on their council house, which was specially adapted for Lennon’s wheelchair, to carer’s allowance for Nikki, disability benefits for Lennon, and tax credits. Ian worked part-time when he could.

The Tory line that 'work pays' has been exposed as a fantasy amid​​ weak pay growth

In 2017, a year ago this month, Lennon passed away. On the very same day, the family’s benefits were stopped: without Lennon, they were no longer eligible for either disability-related benefits or housing and council tax support, while their tax credit was cut by £200 a week. “Some were even back dated to the exact date [Lennon died] and we were sent invoices to pay,” Nikki says.

Going back to work was the only option but instead of a good wage, Ian had to take a job as a consultant, which pays £20,000. Nikki has just started as a 111 call-handler for the NHS on a basic wage working around Ian’s hours and the girls, now aged 10 and five, being at school. Nikki is exhausted. “We’re literally shifting in and out around each other trying to earn as much as possible, while both still struggling with our immense grief,” she says.

Still, the money coming in isn’t enough for the four of them and in the past year, they’ve built debts of £10,000 on two loans and overdrafts. All just to pay the rent, the weekly food shop, and to keep the electricity on. On top of the bills, with so many families on the housing waiting list, Nikki is “living in fear” as she waits to hear if the council will let them keep their house now they don’t need an adapted property. The stress mixed with grief is taking its toll.

Last week, research by the Child Poverty Action Group (CPAG) warned that couples raising two children while working full-time on the minimum wage are falling £49 a week short of being able to provide their family with a “basic, no-frills” lifestyle. Nikki and her family show the unforgiving reality of that, where poverty wages and the social security system, too, often bring debt, unpaid bills and worsening health.

Instead of helping squeezed families, the fact is government policy in recent years has repeatedly tightened the screws. An abject failure to build more social housing at a time of rising private rents has left more than a million families at risk of eviction, while the in-work and child benefits – that are designed to protect parents in such times – are frozen or cut. As the CPAG points out, the rollout of universal credit is further hitting families’ budgets, while unprecedented cuts to local councils are reducing support for parents to skeleton levels – be it children’s centres, libraries, or emergency welfare funds. Like many around the country, the respite centre that helped care for Lennon before he died is to close because of funding cuts; it’s only open still because parents are fighting the closure.

This is not all just morally suspect; it’s bad economics. The cost-cutting adopted by the coalition government and continued by Theresa May has increasingly been shown up for the wasteful ideology it is; where squeezed wages and hollowed out social security make for poorer and sicker citizens, ultimately costing services – from the NHS to the child social care system – more, and a lack of publically owned housing lines landlords’ pockets with taxpayers’ money. Official figures released this week show 80,000 families have spent the summer holidays in temporary accommodation. The number of homeless children is now at 123,000, soaring by 76% since just after David Cameron took power.

The Tory line that “work pays” has been exposed as a fantasy; amid the weakest period for pay growth since the Napoleonic wars, stagnating incomes have not been keeping up with rents and prices for years, with working families needing housing benefit and even emergency food parcels to get by. George Osborne proudly unveiling the so-called “national living wage” in 2015 was the epitome of this fabrication; telling low-paid workers they would be getting a living wage that has been proven to be too low to live on. The Living Wage Foundation estimates employees would need to work for an extra six weeks to make up the shortfall between the government minimum wage and what’s actually needed to cover everyday living costs.

May might claim that a no-deal Brexit “wouldn’t be the end of the world” but for families already struggling, leaving the EU will be a hammer blow to their finances; research estimates that no deal will cost households £1,000 per year, while the most optimistic scenario would lose families £245 each. The only viable domestic response is to finally invest in solutions, from bringing in a real living wage to reversing social security cuts to work allowances, while building more social homes. Ministers may wish to deny it but the thought Nikki keeps coming back to is one of the biggest political predicaments in Britain: “Despite working we’re still struggling to pay our bills and make ends meet.”

• Frances Ryan is a Guardian columnist