§ Lord ABERDAREasked Her Majesty's Government:
What would be the cost of paying out all National Insurance retirement pensions in full and to show separately the estimated extra income tax revenue and the saving on supplementary benefit that would arise; and
What would be the cost of paying out all National Insurance benefits at 993WA the full rate and to show separately the estimated extra income tax revenue and the savings on supplementary benefit that would arise.
§ Lord WELLS-PESTELLThe gross cost of paying a retirement pension at the current standard rate to every person over pension age who has a contribution record would be about £1,200 million a year after allowing for the cessation of other national insurance benefits now being paid (e.g. old person's pension). The savings on supplementary pensions would be about £120 million a year. The income tax yield might be of the order of £250 million a year, but the actual amount would depend,inter alia, on the extent to which pensions which became payable to wives were regarded as the wives' earned income for the purpose of calculating the tax.
There would be considerable extra expenditure on other benefits. It is not possible to quantify the costs with any precision but they would be at least £250 million a year for those persons in respect of whom the Department has some information—e.g. because they had claimed and failed wholly or in part to satisfy the condition for benefit. A large proportion of the potential beneficiaries would not be entitled to supplementary benefit and a large proportion of the benefit in question is not taxed. The savings on supplementary benefit and the yield of income tax would accordingly be small.