§ Lord Balnielasked the Secretary of State for Social Services what is his estimate of the cost of abolishing the earnings rule, after the new level announced on 27th March has been implemented; and what are the main components of the cost of abolition.
§ Mr. O'MalleyAbout £160 million a year immediately. Most of the extra cost, £141 million, would be on the payment of pensions to people who had not yet retired from regular work and to their wives. Against this, there would be savings of £11 million on unemployment and sickness benefit. Payment of full pension to people who had retired but whose pensions were temporarily reduced or 315W extinguished under the earnings rule would cost £7 million. There would also be a loss of contribution income of £23 million a year.