§ Mrs. Wiseasked the Chancellor of the Exchequer on what criteria it has been decided that certain State benefits are taxable and others are not taxable.
§ Mr. Robert SheldonIn principle, State benefits of an income nature should be taxable in the same way as income from other sources. Exceptions to this general rule have been made for a variety of reasons. These include the administrative problems of collecting tax on certain short-term benefits; the inappropriateness of taxing means-tested benefits; special considerations, including the element of compensation, relating to war pensions and industrial injury and disablement benefits; compassionate grounds in the case of attendance allowance for the severely disabled; and the decision to provide family support through tax-free child benefit rather than through child tax allowances and taxable family allowances.