Tax Credits (Hansard, 10 July 2000)

§ Angela Eagle

Precise estimates cannot be made because of the uncertain behavioural effects that would result from the introduction of such an allowance. However, we estimate that introducing a flat rate housing allowance of £30 per week for all recipients of the Working Families Tax Credit (WFTC) would move some claimants off Housing Benefit (HB) in Great Britain in a full year. Assuming that eligible rent in Housing Benefit is reduced by the amount of the housing allowance, the estimated numbers moving off benefit is dependent on the way in which the extra income is treated in the assessment of Housing Benefit and Council Tax Benefit (CTB). The following table gives estimated results based upon either disregarding the housing allowance as income so that claimants do not lose in net income terms:

Estimated number of claimants who would be taken-off benefit in 2000–01 under the proposed £30 housing allowance
Thousand
	Housing Benefit	Council Tax Benefit
Housing allowance disregarded	140	0
Housing allowance assessed as income	170	90

Notes:

1. Estimates are based on the Family Resources Survey.

2. There is currently no administrative data to link WFTC receipt with HB or CTB, so estimates based solely on household survey data should be treated as illustrative only.

3. This household sample does not have an adequate sample size or the necessary information on disability to be able to produce corresponding estimates for Disabled Persons Tax Credit. The reduction in the number of recipients of Housing Benefit as a result of introducing the allowance for recipients of Disabled Persons Tax Credit is, however, likely to be small.

4. Some cases taken-off Housing Benefit may also be among those taken off Council Tax Benefit, so totals cannot be summed.

5. Separate estimate for each tenure category are not available.