§ Mr. David Priceasked the Chancellor of the Exchequer why, among contributory benefits, sickness and invalidity benefits are tax-free but retirement pension is not.
§ Mr. Robert SheldonSickness benefit, which should in principle be taxable, is exempted because of the practical difficulties of collecting tax on short-term benefits. Invalidity benefit, which is payable when entitlement to sickness benefit runs out, is exempted because it would give rise to anomalies if it were treated differently from sickness benefit. These considerations do not apply to the retirement pension.
§ Mr. David Priceasked the Chancellor of the Exchequer why, among non-contributory benefits, attendance allowance is tax-free but mobility allowance is not.
§ Mr. Robert SheldonThere is no reason in principle for distinguishing mobility allowance from other social security benefits which are taxable, and taxing it ensures that the greates benefit goes to those with the smallest incomes. Attendance allowance was exempted on compassionate grounds as a payment intended to help severely disabled people in particularly difficult circumstances.