§ Mr. Ralph Howellasked the Chancellor of the Exchequer whether he is aware that a widow with five dependent children is charged income tax on her social security benefit; if he will explain how this comes about; and what action he will take to change this situation.
§ Mr. Robert SheldonIf, as would normally be the case one or more of the five dependent children were aged over 11, the widow who had no income other than the social security benefits would not pay any tax in 1978–79. If, exceptionally, all five children were under 11, she would be liable to tax of just over £30. She would, however, be receiving child benefit, which is tax free, in addition to her pension and dependency additions, and these benefits would amount in total to £3,228 in 1978–79. In these circumstances, I do not consider that special measures are called for.
§ Mr. Ralph Howellasked the Chancellor of the Exchequer in what cases people who are wholly dependent on social security benefit, and who are in receipt of child's special allowance, can find themselves charged income tax on their welfare benefit.
§ Mr. Robert SheldonChild's special allowance, which is payable to a divorced mother in certain circumstances, is taxable, and tax is payable if the mother has sufficient other taxable income to make her liable. Where, however, a mother entitled to the allowance is wholly dependent on social security benefit in the form of supplementary benefit, which is not taxable, there will be no tax liability.
§ Mr. Tim Smithasked the Chancellor of the Exchequer what would be the cost in a full year, over and above the proposals announced in the Budget statement, of increasing the amount of an individual's total income in respect of which it is proposed to charge the lower rate of income tax of 25 per cent. from £750 to £1,000.
§ Mr. Robert SheldonAbout £455 million, at 1978–79 income levels and after taking into account the proposals in the Budget Statement.
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§ Mr. Tim Smithasked the Chancellor of the Exchequer what would be the cost in a full year, over and above the proposals announced in the Budget statement, of reducing the proposed lower rate of income tax from 25 per cent. to 17 per cent.
§ Mr. Robert SheldonAbout £1,400 million at 1978–79 income levels and after taking into account the proposals in the Budget Statement.
§ Mr. MacGregorasked the Chancellor of the Exchequer what is the reduction in weekly tax as a consequence of proposed 1978 Budget changes for a single person with income of £120 per week, together with the corresponding increase in national insurance contributions.
§ Mr. Robert SheldonI shall let the hon. Member have a reply as soon as possible.