Personal Incomes (Hansard, 19 April 1977)

§ Mr. Orme

, pursuant to his reply [Official Report, 21st March 1977; Vol. 928, c. 417], gave the following information:

The table below gives illustrative details as at March 1977 of the net weekly spending power, including tax refunds where appropriate, of a civil servant, a member of Her Majesty's Forces and an agricultural worker, each with a wife and two children under age 11, during a period of sickness from which he is expected to return to his full normal duties after an absence of less than thirteen weeks. Comparable details of net weekly spending power while he is working are also shown. Because of the conditions peculiar to the occupations and the many assumptions which have had to be made, the figures, which relate to the situation at the time of the hon. Member's Question and apply only to the particular illustrative cases shown, can have no general application and no validity if quoted out of context.

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COMPARISON OF NET WEEKLY SPENDING POWER FOR 3 OCCUPATIONS—MARCH 1977
Occupation	Sickness benefit	Earnings pay while sick	Family allowance	Tax refund	Tax payable	National insurance contribution	Housing costs	Housing rebates	Work expenses	Net weekly spending power
While sick—
(a) Civil Servant	…	…	—	60.00	1.50	2.35	—	1.34	6.62	0.06	—	55.95
(b) H.M. Forces	…	…	—	60.00	1.50	—	10.54	2.97	8.40	—	—	39.59
(c) Agricultural Worker	…	36.71	8.39	1.50	7.55	—	—	—	—	—	54.15
While working—
(a) Civil Servant	…	…	—	60.00	1.50	—	10.54	3.45	6.62	0.06	1.75	39.20
(b) H.M. Forces	…	…	—	60.00	1.50	—	10.54	2.97	8.40	—	—	39.59
(c) Agricultural Worker	…	—	60.00	1.50	—	10.54	3.45	—	—	—	47.51
1. Net weekly spending power is defined as follows: when sick—sickness benefit, plus pay from employer, family allowances, tax refund, housing rebates, less tax, national insurance contribution, gross housing costs, as appropriate; when working—gross earnings, plus family allowances, housing rebates, less tax, national insurance contribution, gross housing costs and work expenses as appropriate.
There would be no entitlement to family income supplement, free school meals or free welfare milk in any of the hypothetical examples shown.
2. Certain assumptions have necessarily been made, as follows:
Housing costs—for the civil servant, a figure of £4.72 rent+£1.90 rates (total £6.62) has been used, as in previous hypothetical examples of this sort requested by the hon. Member. The figure of £8.40 for rental of a married quarter has been provided by the Ministry of Defence. As over half of all regular whole time agricultural workers get free housing, this has been assumed in the example.
Work expenses—a figure of £1.75 has been used for the civil servant, as in previous replies to the hon. Member. For the agricultural worker and the member of H.M. Forces, it has been assumed that work expenses are nil, since both would probably live at or very near to their place of work.
The agricultural worker has been assumed to be in Appointment Grade II for whom the minimum wage is £45.10, who is in addition in receipt of a premium payment plus overtime pay, bringing him up to £60 per week.
The amount of earnings-related supplement has been calculated by assuming that earnings have risen by the increase in the index of average earnings over 21 months, as in previous replies to the hon. Member. It has also been assumed that there has been no previous spell of sickness or unemployment during the period for which earnings-related supplement was calculated.
3. During short-term sickness, the civil servant would, on certain conditions, be paid his normal gross wage, in return for undertaking not to claim national insurance benefit. But since sickness benefit is not taxable, tax is not charged on an amount equivalent to the sickness benefit that would otherwise be claimed, in order to ensure that civil servants are treated in the same way as other employees. Similarly, a national insurance contribution would be calculated on gross pay less an amount equivalent to the benefit which would have been claimed.
4. A member of H.M. Forces retains his normal basic pay, and pays tax and national insurance contributions as if he were working, during the initial period of sickness. He may forfeit special allowances for certain duties normally received while working, but none have been included in this hypothetical illustration.
5. The employer of an agricultural worker is required by law to make up his income from sickness benefit to the level of the worker's minimum wage for a standard week of 40 hours over a limited period. Employers may provide more sick pay if they wish.
6. Approximate amounts of tax refund have been included where appropriate. These would continue only until the end of the relevant tax year, or earlier if full refund of tax paid had been made.

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