§ Mr. Ralph Howell
asked the Secretary of State for Social Services if he will update, in line with recent tax and benefit changes, the net weekly spending power figures published in reply to the hon. Member for Norfolk, North—Official Report, 22nd November 1977, columns 683–90—showing the relative financial position in and out of work for each family grouping, on the assumptions that the taxpayer is contracted out of the State pension scheme and that earnings or previous earnings were: £25, £35, £45, £55, £65, £75, £85, £95 and £105.
§ Mr. Orme
The information requested is set out in the tables below. The lowest level of earnings quoted has, however, been raised to £30 a week since full-time 699W earnings below this level are now unlikely. The assumptions made about the ages of children and housing and work expenses are shown at the head of each table. Income tax refunds have not been included as part of the net weekly spending power of the unemployed man for the reasons given in the reply to the hon. Member on 15th October 1976. The approximate weekly amounts of such refunds, where payable, would now be as follows:
Approximate weekly amount of tax refund Family type 25 per cent. tax paid only 25 and 33 per cent. tax paid £ £ Single person 4.75 7.60 Married couple 7.40 11.05 Married couple plus one child aged 3 7.90 11.70 Married couple plus 2 children aged 4 and 6 8.35 12.35 Married couple plus 4 children aged 3, 8, 11 and 16 9.80 14.25
Receipt of tax refunds may affect entitlement to free school meals but is unlikely to affect any other means-tested benefit.
Other assumptions made to compile the tables are as follows:
- 1. For married couples the wife has no personal income—apart from child benefit where appropriate—from earnings or social security benefits.
- 2. There have been no previous spells of unemployment or sickness which would affect the amount of unemployment benefit and earnings related supplement payable.
- 3. Means-tested benefits are taken up in full by working and unemployed families. In the case of family income supplement, where entitlement existed while at work payment continues for the first six months of unemployment.
- 4. There are no tax allowances other than personal allowances.
As requested, the national insurance contributions payable are those for persons contracted out of the State scheme. Such persons would, however, usually be required to make some contribution to their employer's pension scheme.
The tables relate only to the particular illustrative situations quoted and have no general application and no validity if quoted out of context without stating the assumptions used.