§ Mr. George Cunninghamasked the Secretary of State for Social Services what proposals he has for family income supplement after the introduction of child benefit.
§ Mr. OrmeWe shall shortly be making regulations to disregard the full amount 789W of child benefit as income in the calculation of family income supplement (FIS). As required under amendments to the Family Income Supplements Act contained in the Child Benefit Act 1975, we shall also be laying draft regulations before Parliament specifying the prescribed amounts and maximum payments which will apply to FIS following the introduction of child benefit.
The draft regulations will propose that, from 5th April 1977, the prescribed amount for a family with one child should remain, as now, at £39 and the maximum weekly FIS payments at £8.50 for a family with one child plus 50p for each additional child, but that, to take account of the child benefit disregard, the step in the prescribed amount for second and subsequent children should be reduced by £1 from £4.50 to £3.50. Taken together, these proposals would mean that all FIS beneficiaries would gain at least the full net value of child benefits; in addition, lone parent families with one child who have been receiving child interim benefit would have their FIS increased when child benefit replaces child interim benefit and is disregarded as income, as would all families with more than one child. This is because the step in the prescribed amount would be reduced by only £1 whereas the £1.50 benefit for each child which they will continue to receive will be wholly disregarded from 5th April.
Order books will now be recalled so that the necessary adjustments can be made in time. These adjustments will, of course, be made subject to Parliament's approving the proposals.
We have sought to ensure as far as possible that the replacement of means-tested benefits, at least in part, by universal benefit does not result in a net loss of income. The disregard or child benefit for FIS purposes resolves the core of the problem, in as much as it protects families from losing FIS or any of the other means-tested benefits which they receive under the FIS passport arrangements. To eliminate any possibility of net losses in respect of means-tested benefits not being received under the passport arrangements would be impossible without altogether disproportionate expense. In any event, there are only two very small groups of families who may lose 790W under the proposed arrangements—and then no more than a few pence a week—some receiving free school meals by direct claim and some receiving either rent and rate rebates or a rent allowance and a rate rebate.
As regards free school meals, an appropriate part of child benefit will be disregarded as income. It is not, however, proposed to do likewise for housing benefits because the arrangements as they stand will ensure that the vast majority of beneficiaries will gain in net income terms. Existing discretionary powers will be used to protect from net income loss all families receiving free welfare milk and vitamins by direct claim on grounds of low income.
A small number of families will cease to qualify for supplementary benefits, but they will normally be able to continue to receive other benefits such as free school meals and free welfare milk and vitamins by direct claim on grounds of low income. Special arrangements will ensure that they are not excluded from the electricity discount scheme provided the other conditions of the discount scheme are met.