§ Earl Russell
asked Her Majesty's Government
Further to key fact 4 in The Case for Welfare Refortn (Department of Social Security, 15 January), what heads of social security expenditure account for the fact that the share of social security benefits going to the poorest 20 per cent. has fallen since 1979. [HL654]90WA
§ Baroness Hollis of Heigham
The information available is set out in the tables. The proportion of benefit received by those in the bottom 20 per cent. of the income distribution has declined for both means tested benefits and for contributory benefits since 1979.
The incomes of those in the bottom 20 per cent. of the income distribution have remained constant in real terms, after housing costs have been taken into account, whereas average incomes have increased by 42 per cent. and the incomes of the top quintile have increased by more than 50 per cent.
Expenditure on pensioners is now less likely to be received by those in the bottom quintile of the overall income distribution. This is because pensioners are much less likely to be in the bottom quintile. This movement of pensioners up the income distribution has partly been caused by the increasing numbers of low income people of working age, displacing pensioners at the bottom of the income distribution. In addition, the incomes of low income pensioners have risen by more than the incomes of low income non-pensioners. Increased receipt of disability benefits has helped to boost pensioner incomes.
The proportion of Social Security expenditure received by individuals in the bottom 20 per cent, of the income distribution by-type of recipient Share received by-people in the bottom 20 per cent. Proportion of total Social Security bill received by people of each type Type of Recipient 1979 1994–95 1979 1994–95 Pensioner 49 20 54 47 Working age in a workless household 74 57 13 29 Working age in a working household 15 19 32 24 All 42 30 100 100
1. In this table, a "pensioner" is someone living in a benefit unit where all adults in the benefit unit are over state pension age; "Working age in a workless household" recipients are people living in a working age benefit unit where all members of the household in which they live are out of work; and "Working age in a working household" are recipients living in a working age benefit unit where at least one member of the household is in work.
2. The information is calculated from survey data where individuals report which benefits they receive.
3. Income is the standard Households Below Average Income measure—household net equivalised income after housing costs.
4. The survey covers the private household population. People living in institutions, hostels, bed and breakfast accommodation and the homeless are not covered here.
5. The income distribution refers to the whole population income distribution and not the income distribution for each type or person.
6. Estimates are based on the 1979 and 1994–95 and 1995–96 Family Expenditure Surveys and are subject to sampling error.
7. 1994–95 refers to the 1994–95 and 1995–96 financial years combined.
8. Income has been adjusted for household size and composition (equivalisation) but no adjustment has been made for any additional "needs" of disabled people.91WA
The Proportion of Social Security Expenditure Received by Individuals in the Bottom 20 per cent, of the Income Distribution by Benefit Category Share received by-people in the bottom 20 per cent. Proportion of total Social Security bill accounted for by each type of benefit Type of Recipient 1979 1994–95 1979 1994–95 Means Tested 71 56 14 31 Contributory 42 19 65 50 Other 20 18 21 19 All 42 30 100 100
1. Components of each category are:
Means tested benefits—supplementary benefit, rent and rate rebates, family income supplement.
Contributory benefits—retirement pension, invalidity benefit, unemployment benefit, widow's benefit, sickness benefit, maternity allowance.
Non-contributory, non-means tested—war disability pension, attendance allowance, child benefit, housewives non-contributory invalidity pension, non-contributory invalidity pension (predecessors of SDA), industrial injuries disablement pension, invalid care allowance, mobility allowance, Christmas bonus, any others reported.
Means tested benefits—income support, housing benefit, council tax benefit, family credit.
Contributory benefits—retirement pension, invalidity benefit (1994–95), unemployment benefit, widows benefit, sickness benefit (1994–95), incapacity benefit (1995–96), statutory sick pay, statutory maternity pay, maternity allowance.
Non-contributory, non-means tested—war disability pension, attendance allowance, child benefit, severe disablement allowance, 92WA industrial injuries disablement pension, invalid care allowance, disability living allowance, Christmas bonus, any others reported.
2. Income has been adjusted for household size and composition (equivalisation) but no adjustment has been made for any additional "needs" of disabled people.