§ Mr. George Cunninghamasked the Secretary of State for Social Services what is his estimate of (a) the value of additional retirement pensions payable during 1975–76 by reason of the change in the earnings rule enacted in February 1975 and (b) the tax payable on these additions.
§ Mr. O'MalleyA precise estimate cannot be made of the cost of relaxing the earnings rule in April 1975 because the effect on the numbers of additional retirement pensions payable has been subsumed within the changes in the economy which have caused more people to retire. Moreover it appears from the available data that the additional number of pensioners built up slowly during the year. However, the extra expenditure on retirement pensions during 1975–76 is expected to be about £40 million and is now at the annual rate of about £60 million. In addition, it is estimated that the change in the earnings rule applicable to the dependent wives of invalidity pensioners has resulted in additional benefit cost of about £10 million a year. I regret that an estimate cannot be made of the income tax payable on the additional benefit.
§ Mr. George Cunninghamasked the Secretary of State for Social Services what is his estimate of the value of additional retirement pensions payable in 1977–78 if the earnings rule threshold in that year were set at £35 plus an element to reflect rises in earnings between April 1976 and April 1977; and what is the estimate of the additional tax payable on such additional pensions, assuming current rates of tax.
§ Mr. O'MalleyIt is estimated that, as compared with the present situation of an earnings limit of £20 a week, a limit of £35 a week in 1977–78, plus an increase to reflect rises in earnings since April 1976, would involve the expenditure of an extra £35 million in retirement pension at current benefit rates.354W There would be an income tax yield of £12 million at current rates of tax.
§ Mr. George Cunninghamasked the Secretary of State for Social Services how many persons are at present having their retirement pensions reduced under the earnings rule.
§ Mr. O'MalleyApproximately 4,600 in July 1975, the latest date for which figures are available. A further 6,500 had their pensions extinguished.
§ Mr. George Cunninghamasked the Secretary of State for Social Services how many persons are at present denied a retirement pension under the retirement condition.
§ Mr. O'MalleyI regret that this information is not available. It is tentatively estimated that about 120,000 people over pension age have title to pension on their own contributions but, instead of drawing retirement pension, are earning increments. About 70,000 of them are married men who, if they retired, would entitle their wives to pensions or would be able to draw dependency increases for them.
§ Mr. George Cunninghamasked the Secretary of State for Social Services how many persons who would otherwise be denied a retirement pension by reason of not having ceased regular employment do receive a pension by reason of their earnings not exceeding the threshold level for the earnings rule.
§ Mr. O'MalleyI regret that the information on which to make a reliable estimate is not available.