HC Deb 18 June 1980 vol 986 cc561-6W
Mr. Ralph Howell

asked the Secretary of State for Social Services if he will publish a table, on the same basis as the reply given to the hon. Member for Norfolk, North, Official Report, 7 November 1979, column 213, showing the effect on spending power for a single person, a married couple and a couple with two children of making benefits reckonable for tax, and of abolishing earnings-related supplement, assuming previous earnings of £45, £55, £65, £75, £85, £95 and £105, and illustrating the effects on the spending power of recipients of (a) unemployment benefit, (b) invalidity benefit, (c) widows pension and (d) supplementary benefit.

Mrs. Chalker

[pursuant to her reply, 10 June 1980, c. 141–42]: I regret that it is not possible to provide information under all the heads requested by my hon. Friend. However, the tables below show net weekly spending power as at November 1979 both with and without earnings-related supplement where that is appropriate : earnings-related supplement is not payable with invalidity benefit or supplementary benefit. My hon. Friend will appreciate that these tables cannot be used to illustrate the position as it will be in January 1982, the date from which it is proposed to abolish the remaining earnings-related supplement. By January 1982, flat-rate benefits will have been uprated twice and the real value of earnings-related supplement will have declined.

It is not possible to include the effects of making benefits reckonable for tax because the precise shape of the arrangements for taxing benefits is not yet known.

The assumptions on which the tables have been based all relate to November 1979. Other assumptions have been made as follows : For married couples, the wife has no personal income from earnings or social security benefits, apart from child benefit where appropriate ; There have been no previous spells of unemployment or sickness which would affect the amount of benefit and any earnings-related supplement payable ; Means-tested benefits are taken up in full. In the case of family income supplement, payment is assumed to continue for the first six months of unemployment or widowhood.

TABLE Al—UNEMPLOYMENT BENEFIT WITH EARNINGS-RELATED SUPPLEMENT
Earnings-related supplement is payable with unemployment benefit only from weeks 3 to 28
November 1979
Family type Previous earnings Unemployment benefit Child benefit Family income supplement Rent Rent rebate Rates Rate rebates Free school meals Free welfare milk Net weekly spending power
£ £ £ £ £ £ £ £ £ £ £
single person … … … … 45 24.68 — — 5. 40 4.83 2.30 1.89 — — 23.70
55 25.94 — — 5.40 4.52 2.30 1.79 — — 24.55
65 27.20 — — 5.40 4.20 2.30 1.69 — — 25.39
75 28.46 — — 5.40 3.89 2.30 1.59 — — 26.24
85 29.72 — — 5.40 3.57 2.30 1.49 — — 27. 08
95 30.98 — — 5.40 3.26 2.30 1.39 — — 27.93
105 32.24 — — 5.40 3.04 2.30 1.31 — — 28.89
Married couple … … … … 45 32.16 — — 5.40 5.40 2.30 2.30 — — 32.16
55 37.39 — — 5.40 5.28 2.30 2.03 — — 37.00
65 38.65 — — 5.40 4.97 2.30 1.93 — — 37.85
75 39.91 — — 5.40 4.65 2.30 1.83 — — 38.69
85 41.17 — — 5.40 4.33 2.30 1.73 — — 39.53
95 42.43 — — 5.40 4.02 2.30 1.63 — — 40.38
105 43.69 — — 5.40 3.70 2.30 1.53 — — 41.22
Married couple with two children aged 4and 6 45 33.35 8.00 7.80 6.50 6.50 2.80 2.62 1.50 1.05 51.52
55 39.31 8.00 2.80 6.50 6.50 2.80 2.55 1.50 1.05 52.41
65 42.05 8.00 — 6.50 6.50 2.80 2.55 1.50 — 51.30
75 43.31 8.00 — 6.50 6.31 2.80 2.45 1.50 — 52.27
85 44.57 8.00 — 6.50 5.99 2.80 2.35 1.50 — 53.11
95 45.83 8.00 — 6.50 5.68 2.80 2.25 1.50 — 53.96
105 47.09 8.00 — 6.50 5.36 2.80 2.15 1.50 — 54.80
TABLE A2—UNEMPLOYMENT BENEFIT WITHOUT EARNINGS-RELATED SUPPLEMENT
November 1979
Family type Previous earnings Unemployment benefit Child benefit Family income supplement Rent Rent rebates Rates Rate rebate Free school meals Free welfare milk Net weekly spending power
£ £ £ £ £ £ £ £ £ £ £
Single person … … … … Any 18.50 — — 5.40 5.40 2.30 2.30 — — 18.50
level
Married couple … … … … Any 29.95 — — 5.40 5.40 2.30 2.30 — — 29.95
level
Married couple with two children aged 4 and 6 45 33.35 8.00 7.80 6.50 6.50 2.80 2.62 1.50 1.05 51.52
55 33.35 800 2.80 6.50 6.50 2.80 2.80 1.50 1.05 46.70
65–7;105 33.35 8.00 — 6.50 6.50 2.80 2.80 1.50 1.05 43.90*
*There would also be entitlement to supplementary benefit, making the net weekly spending power £44.65.

TABLE Bl—WIDOWS ALLOWANCE WITH EARNINGS-RELATED ADDITION
Earnings-related addition is payable only with widow's allowance for the first 26 weeks
November 1979
Family type Previous earnings of husband Widow's benefit Child benefit Family income supplement Rent Rent rebate Rates Rate rebate Free schooL meals Free welfare milk Net weekly spending power
£ £ £ £ £ £ £ £ £ £ £
Widow (under pension age) … … 45 32.16 — — 5.40 3.05 2.30 1.31 — — 28.82
55 34.74 — — 5.40 2.61 2.30 1.16 — — 30.81
65 36.06 — — 5.40 2.39 2.30 1.08 — — 31.83
75 37.26 — — 5.40 2.18 2.30 1.01 — — 32.75
85 38.52 — — 5.40 1.97 2.30 0.93 — — 33.72
95 39.78 — — 5.40 1.76 2.30 0.86 — — 34.70
105 41.04 — — 5.40 1.54 2.30 0.78 — — 35.66
Widow (under pension age) with two children aged 4 and 6. 45 40.00 8.00 7.80 6.50 5.19 2.80 2.09 1.50 1.05 56.33
55. 40.00 8.00 2.80 6.50 6.44 2.80 2.49 1.50 1.05 52.98
65 46.45 8.00 — 6.50 5.53 2.80 2.20 1.50 — 54.38
75 49.96 8.00 — 6.50 4.65 2.80 1.92 1.50 — 56.73
85 51.22 8.00 — 6.50 4.33 2.80 1.82 1.50 — 57.57
95 52.48 8.00 — 6.50 4.02 2.80 1.72 1.50 — 58.42
105 53.74 8.00 — 6.50 3.77 2.80 1.63 1.50 — 59.34
TABLE B2 WIDOWS ALLOWANCE WITHOUT EARNINGS-RELATED ADDITION
November 1979
Family type Previous earnings of husband Widow's benefit Child benefit Family income supplement Rent Rent rebate Rate Rate rebate Free school meals Free welfare milk Net weekly spending power
£ £ £ £ £ £ £ £ £ £ £
Widow (under pension age) … … Any level 27.30 — — 5.40 4.18 2.30 1.68 — — 25.46
Widow (under pension age) with two children aged 4 and 6. 45 40.00 8.00 7.80 6.50 5.19 2.80 2.09 1.50 1.05 56.33
55 40.00 8.00 2.70 6.50 6.44 2.80 2.49 1.50 1.05 52.98
65–105 40.00 8.00 — 6.50 6.50 2.80 2.72 1.50 — 49.42
Note on tables B1 and B2: Widow's benefit is already subject to tax. The tax position during the first year of widowhood would have depended on the particular tax week in which the husband had died.