§ Mrs. Chalkerasked the Secretary of State for Social Services how many wage and salary earners are now estimated to be made poorer by any increase in earnings due to the effect of their increase on their entitlement to family income supplement, rent and rate rebates, free school meals and free welfare milk, and on their income tax liability.
§ Mr. MeacherIt is estimated that at August 1974, the latest date for which figures are available, about 50,000 families with children where the head of the family was in full-time work could theoretically have been worse off after a pay rise of £1. More up to date figures are expected to become available shortly.
NOTES:
- (i) Both one and two parent families are included. In the population there are about 6.5 million such families.
766 - (ii) The estimate is subject to sampling error.
- (iii) The calculation has taken account ct income tax, National Insurance contributions, Family Income Supplement, Rent and rate rebates, and the value of free school meals and free welfare milk.
- (iv) Families subject to higher than the standard rate of tax have been excluded.
- (v) The estimate is based on the assumption that tax and benefits change immediately the pay rise is given. This is unlikely to happen in practice—for example, family income supplements, free school meals and free welfare milk are awarded for periods of 52 weeks. The practical effect over time of an increase in earnings will also depend on other factors including any intervening changes in tax rates or allowances, National Insurance contributions and the income limits for benefits.