HC Deb 01 July 1975 vol 894 cc379-80W
Mr. Kenneth Clarke

asked the Secretary of State for Social Services how many wage and salary earners are currently estimated to be made poorer by any increase in their earnings because of the effect of that increase in pay 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. O'Malley

It 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 later in the year.

NOTES

  1. (i) 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 380 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.
  2. (ii) The estimate is subject to sampling error.
  3. (iii) The calculation has taken account of income tax, national insurance contributions, family income supplement, rent and rate rebates, and the value of free school meals and free welfare milk.
  4. (iv) Families subject to higher than the standard rate of tax have been excluded.
  5. (v) Both one and two parent families are included. In the population there are about 6.5 million such families.

Mr. Corrie

asked the Secretary of State for Social Services how much a person may earn and still receive social security at the same time.

Mr. O'Malley

The weekly amount that can be earned without affecting entitlement to supplementary benefit—to which I assume the Question refers—is at present £1 in the case of a person required to register for employment, or for a child, and £2 for any other person. As from week beginning 17th November 1975 it will be £2 for those required to register and £4 for others, apart from children, whose earnings will then be wholly disregarded. Earnings in excess of those amounts would be offset in full against the person's requirements and the amount of earnings which would extinguish entitlement to benefit would depend on the level of requirements and any other resources, which vary from case to case.