HC Deb 19 February 1981 vol 999 cc199-207W
Mr. Ralph Howell

asked the Secretary of State for Social Services if he will publish a table using the same basic assumptions as in his reply to the hon. Member for Norfolk, North, Official Report, 27 October 1980, c. 193, and for each of a single person, a married couple and a couple with two children, showing net weekly spending power (a) when working normally and earning £55, £75,

Married Couple with Two Children aged 4 and 6 Rent £8.80 Rates £3.55 Child Benefit £9.50 Work expenses £3.55
Earnings Tax National FIS Rent rebate Rate rebate Free school meals Free welfare milk Net weekly insurance spending power
55 4.13 3.71 9.50 6.91 2.65 2.25 1.30 63.37
75 10.13 5.06 — 4.60 1.89 2.25 — 62.15
95 16.13 6.41 — 1.20 0.69 — — 67.95
105 19.13 7.09 — — 0.09 — — 72.47
125 25.13 8.44 — — — — — 85.03

£95, £105 and £125 a week, (b) when working short-time for three days a week and (c) when working short-time for four days a week.

Mrs. Chalker

[pursuant to her reply, 4 February 1981, c. 142]: The information requested is set out in the following tables. My hon. Friend will appreciate that the figures relate only to the hypothetical examples he has chosen.

The assumptions made about the ages of the children, the rent and rates payable and the travel-to-work expenses incurred are shown at the head of each set of tables. Other assumptions have been made as follows:

  1. (i) all entitlement to benefits is taken up;
  2. (ii) family income supplement (FIS) has been claimed where appropriate when the head of family was in full-time work and FIS is still in payment;
  3. (iii) the value of free welfare milk is £1.30 a week;
  4. (iv) where unemployment benefit is payable, the three "waiting days" have been served;
  5. (v) the family has no capital or income except as shown;
  6. (vi) normal earnings include no payment for overtime;
  7. (vii) normal working hours are 40 hours a week, that is eight hours a day for five days a week;
  8. (viii) when working short-lime, earnings are a proportion of normal earnings, proportionate to the numbers of days worked;
  9. (ix) for the purposes of these examples, payments under the Short Time Working Compensation Scheme (STWCS) are at the rate of 50 per cent. of normal daily pay; and
  10. (x) when working short-time, travel-to-work expenses are scaled down proportionately;

Table 1 Net weekly spending power (£) where the head of the family is working full time
Single Person Rent £7.70 Rates £2.90 Work Expenses £3.55
Earnings Tax National insurance Rent rebate Rate rebate Net weekly spending power
55 8.57 3.71 2.83 1.11 32.51
75 14.57 5.06 — — 41.22
95 20.57 6.41 — — 53.87
105 23.57 7.09 — — 60.19
125 29.57 8.44 — — 72.84
Married Couple Rent £7.70 Rates £2.90 Work Expenses £3.55
Earnings Tax National insurance Rent rebate Rate rebate Net weekly spending power
55 4.13 3.71 6.20 2.24 41.45
75 10.13 5.06 2.29 0.92 48.87
95 16.13 6.41 — — 58.31.
105 19.13 7.09 — — 64.63
125 25.13 8.44 — — 77.28

Table II Net weekly spending power (£) where the head of the family is working 3 days a week only, and in receipt of 2 dens unemployment benefit (see note 1)
Single Person Rent £7.70 Rates £2.90 Work expenses £2.13
Normal earnings Short-time earnings Unemploy ment benefit Tax National insurance Rent rebate Rate rebate Net weekly spending power
55 33 6.88 1.97 2.23 5.78 2.11 30.84
75 45 6.88 5.57 3.04 3.37 1.30 35.21
95 57 6.88 9.17 3.85 1.33 0.58 40.04
105 63 6.88 10.97 4.25 0.31 0.22 42.46
125 75 6.88 14.57 5.06 — — 49.52
Married Couple Rent £7.70 Rates £2.90 Work expenses £2.13
Normal earnings Short-time earnings Unemployment benefit Tax National insurance Rent rebate Rate rebate Net weekly spending power
55 33 11.13 — 2.23 7.70 2.90 39.77
75 45 11.13 1.13 3.04 5.91 2.15 47.29
95 57 11.13 4.72 3.85 3.46 1.33 51.62
105 63 11.13 6.53 4.25 2.44 0.97 54.03
125 75 11.13 10.13 5.06 0.40 0.25 58.86
Married couple with two children aged 4 and 6 Rent £8.80 Rates £3.55 Child Benefit £9.50 Work expenses £2.13
Normal earnings Short-time earnings Unemployment benefit Tax National insurance FIS Rent rebate Rate rebate Free school meals Free welfare milk Net weekly spending power
55 33 11.97 — 2.23 9.50 8.80 3.45 2.25 1.30 63.06
75 45 11.97 1.13 3.04 — 8.79 3.25 2.25 — 62.11
95 57 11.97 4.72 3.85 — 5.79 2.29 2.25 — 65.75
105 63 11.97 6.53 4.25 — 4.61 1.89 — — 65.71
125 75 11.97 10.13 5.06 — 2.57 1.17 — — 70.54
Table III Net weekly spending power (£) where the head of the family is working 4 days a week only, and in receipt of 1 days unemployment benefit (see Notes I and 2)
Single Person Rent £7.70 Rates £2.90 Work expenses £2.84
Normal earnings Short-time earnings Unemployment benefit Tax National insurance Rent rebate Rate rebate Net weekly spending power
55 44 3.44 5.27 2.97 4.12 1.56 31.44
75 60 3.44 10.07 4.05 1.40 0.60 37.88
95 76 3.44 14.87 5.13 — — 46.00
105 84 3.44 17.27 5.67 — — 51.06
125 100 3.44 22.07 6.75 — — 61.18
Married Couple Rent £7.70 Rates £2.90 Work expenses £2.84
Normal earnings Short-time earnings Unemployment benefit Tax National insurance Rent rebate Rate rebate Net weekly spending power
55 44 5.57 0.83 2.97 7.55 2.68 42.56
75 60 5.57 5.63 4.05 3.89 1.48 47.82
95 76 5.57 10.43 5.13 1.17 0.52 54.26
105 84 5.57 12.83 5.67 — 0.04 57.67
125 100 5.57 17.63 6.75 — — 67.75
Married couple with two children aged 4 and 6 Rent £8.80 Rates £3.55 Child Benefit £9.50 Work expenses £2.84
Normal earnings Short-time earnings Unemployment benefit Tax National insurance FIS Rent rebate Rate rebate Free school meals Free welfare milk Net weekly spending power
55 44 5.98 0.83 2.97 9.50 8.16 3.05 2.25 1.30 64.75
75 60 5.98 5.63 4.05 — 6.54 2.53 2.25 — 61.93
95 76 5.98 10.43 5.13 — 3.41 1.47 — — 65.61
105 84 5.98 12.83 5.67 — 2.05 0.99 — — 68.83
125 100 5.98 17.63 6.75 — — 0.03 — — 75.94

Table IV Net weekly spending power (£) where the head of the family is working three days a week only, with temporary short-time working scheme compensation for two workless days Single Person Rent £7.70 Rates £2.90 Work expenses £2.13
Normal earnings Short-time earnings STWC Tax National insurance Rent rebate Rate rebate Net weekly spending power
55 33 11 5.27 2.97 4.75 1.78 29.56
75 45 15 10.07 4.05 1.98 0.81 35.94
95 57 19 14.87 5.13 — — 43.27
105 63 21 17.27 5.67 — — 48.33
125 75 25 22.07 6.75 — — 58.45
Married Couple Rent £7.70 Rates £2.90 Work expenses £2.13
Normal earnings Short-time earnings STWC Tax National insurance Rent rebate Rate rebate Net weekly spending power
55 33 11 0.83 2.97 7.70 2.90 38.07
75 45 15 5.63 405 4.95 1.84 44.38
95 57 19 10.43 5.13 2.12 0.86 50.69
105 63 21 12.83 5.67 0.76 0.38 53.91
125 75 25 17.63 6.75 — — 62.89
Married couple with 2 children aged 4 and 6 Rent £880 Rates £3.55 Child Benefit £9.50 Work expenses £2.13
Normal earnings Short-time earnings STWC Tax National insurance FIS Rent rebate Rate rebate Free school meals Free welfare milk Net weekly spending power
55 33 11 0.83 2.97 9.50 8.80 3.53 2.25 1.30 60.60
75 45 15 5.63 4.05 — 8.0 3.01 2.25 — 58.64
95 57 19 10.43 5.13 — 4.43 1.83 2.25 — 63.97
105 63 21 12.83 5.67 — 3.07 1.35 2.25 — 67.19
125 75 25 17.63 6.75 — 0.35 0.39 — — 71.38
Table V Net weekly spending power (£) where the head of the family is working four days a week only, with temporary short.time working scheme compensation for one workless day Single Person Rent £7.70 Rates £2.90 Work expenses £2.84
Normal earnings Short-time earnings STWC Tax National insurance Rent rebate Rate rebate Net weekly spending power
55 44 5.50 6.92 3.34 3.77 1.44 31.01
75 60 7.50 12.32 4.56 0.71 0.36 38.25
95 76 9.50 17.72 5.77 — — 48.57
105 84 10.50 20.42 6.38 — — 54.26
125 100 12.50 25.82 7.59 — — 65.65
Married Couple Rent £7.70 Rates £2.90 Work expenses £2.84
Normal earnings Short-time earnings STWC Tax National insurance Rent rebate Rate rebate Net weekly spending power
55 44 5.50 2.48 3.34 7.57 2.68 40.49
75 60 7.50 7.88 4.56 3.57 1.37 46.56
95 76 9.50 13.28 5.77 0.51 0.29 53.81
105 84 10.50 15.98 6.38 — — 58.70
125 100 12.50 21.38 7.59 — — 70.09
Married couple with 2 children aged 4 and 6 Rent £8.80 Rates £3.55 Child Benefit £9.50 Work expenses £2.84
Normal earnings Short-time earnings STWC Tax National insurance FIS Rent rebate Rate rebate Free school meals Free welfare milk Net weekly spending power
55 44 5.50 2.48 3.34 9.50 8.28 3.09 2.25 1.30 62.41
75 60 7.50 7.88 4.56 — 6.16 2.41 2.25 — 60.19
95 76 9.50 13.28 5.77 — 2.82 1.26 2.25 — 67.09
105 84 10.50 15.98 6.38 — 1.29 0.72 — — 68.46
125 100 12.50 21.38 7.59 — — — — — 77.84

Table VI Net weekly spending power {£) where the head of the family is working three days a week only, and not in receipt of unemployment benefit or temporary short-time working scheme compensation
Single Person Rent £7.70 Rates £2.90 Work expenses £2.13
Normal earnings Short-time earnings Tax National insurance Rent rebate Rate rebate Net weekly spending power
55 33 1.97 2.23 7.50 2.66 26.23
75 45 5.57 3.04 4.53 1.71 29.90
95 57 9.17 3.85 2.50 0.99 34.74
105 63 10.97 4.25 1.47 0.63 37.15
125 75 14.57 5.06 — — 42.64

Married couple with two children aged 4 and 6 Rent £8.60 Rates £3.55 Child Benefit £9.50 Work expenses £2.13
Normal earnings Short-time earnings Tax National insurance FIS Rent rebate Rate rebate Free school meals Free welfare milk Net weekly earnings spending power
55 33 — 2.23 9.50 8.80 3.55 2.25 1.30 *51.19
75 45 1.13 3.04 — 8.80 3.55 2.25 1.30 *51.75
95 57 4.72 3.85 — 8.78 3.25 2.25 — 57.73
105 63 6.53 4.25 — 7.28 2.77 2.25 — 59.54
125 75 10.13 5.06 — 4.60 1.89 2.25 — 63.58
* Could qualify for a supplementary allowance to bring net weekly spending power up to £54.15 a week (see Note 7).

Table VII Net weekly spending power (£) where the head of the family-is working four days a week only, and not in receipt of unemployment benefit or temporary short-time working scheme compensation Single Person Rent £7.70 Rates £2.90 Work expenses £2.84
Normal earnings Short-time earnings Tax National insurance Rent rebate Rate rebate Net weekly earnings spending power
55 44 5.27 2.97 4.75 1.78 28.85
75 60 10.07 4.05 1.98 0.81 35.23
95 76 14.87 5.13 — — 42.56
105 84 17.27 5.67 — — 47.62
125 100 22.07 6.75 — — 57.74

Married couple with two children aged 4 and 6 Rent £8.80 Rates £3.55 Child Benefit £9.50 Work expenses £2.84
Normal earnings Short-time earnings Tax National insurance FIS Rent rebate Rate rebate Free school meals Free welfare milk Net weekly spending power
55 44 0.83 2.97 9.50 8.80 3.53 .2.25 .1.30 .59.89
75 60 5.63 4.05 — 8.03 3.01 2.25 — 57.93
95 76 10.43 5.13 — 4.43 1.83 2.25 — 63.26
105 84 12.83 5.67 — 3.07 1.35 2.25 — 66.48
125 100 17.63 6.75 — 0.35 0.39 — — 70.67

Notes

1. In order to qualify for unemployment benefit during periods of short-time working the following conditions must be met:

(a) a guaranteed weekly wage is not being paid under the provisions of the Employment Protection (Consolidation) Act 1978.

(b) the employer is not making up the normal wage.

(c) the normal contribution conditions are satisfied.

(d) the employee is available for work on the days he registers for work.

2. Unemployment benefit is normally payable for 6 days a week. However the "idle day rule" precludes payment for a day which is not normally a working day.

3.Unemployment benefit is not normally payable for a period lasting only one day. But one day's unemployment one week can be linked with one day's unemployment the next week, provided they both occur within a period of six consecutive benefit days. This is assumed to be the situation in table III.

4. Earnings related supplement is not payable during periods of short-time working.

Married Couple Rent £7.70 Rates £2.90 Work expenses £2.13
Normal earnings Short-timee arnings Tax National insurance Rent rebate Rate rebate Net weekly spending power
55 33 — 2.23 7.70 2.90 28.64*
75 45 1.13 3.04 7.70 2.90 38.70
95 57 4.72 3.85 5.70 2.08 43.48
105 63 6.53 4.25 4.33 1.64 45.46
125 75 10.13 5.06 2.29 0.92 50.29
* Could qualify for a supplementary allowance to bring net weekly spending power up to £34.60 a week (see note 7).

Married Couple Rent £7.70 Rates £2.90 Work expenses £2.84
Normal earnings Short-time earnings Tax National insurance Rent rebate Rate rebate Net weekly spending power
55 44 0.83 2.97 7.70 2.90 37.36
75 60 5.63 4.05 4.95 1.84 43.67
95 76 10.43 5.13 2.12 0.86 49.98
105 84 12.83 5.67 0.76 0.38 53.20
125 100 17.63 6.75 — — 62.18

5. The temporary short-time working compensation scheme provides for compensation to employers who are prepared to adopt short-time working as an alternative to implementing redundancies affecting 10 or more workers in an establishment. It covers all employees except those who do not qualify for guarantee payments under the provisions of the Employment Protection (Consolidation) Act 1978. Under the scheme employers must pay 50 per cent. of normal pay to workers on short-time for their workiess days. Payments under the scheme count for income tax and national insurance contributions in the normal way.

6. Mandatory provision of free school meals ceases when title to family income supplement or supplementary benefit ceases but local education authorities have discretion to allow free or cheap meals to other children and these tables illustrate the case where an authority continues to apply the November 1979 conditions for entitlement.

7. Net weekly spending power when in recipt of supplementary benefit is calculated by adding together the appropriate scale rates, any additional requirements—for example, the heating addition for a child under 5—and where appropriate the value of benefits such as free school meals and free welfare milk.

8. In compiling the tables no account has been taken of any income tax refunds payable to those working short-time. In practice such refunds would be uncommon as no refund can be made for any week when tax is payable. In the examples given in the tables any refund would be 30 per cent. of the amount by which tax allowance exceed taxable PAYE income. The maximum refund—payable only if there were no income that week—would be £12.38 a week for a married couple with or without children—or £7.93 a week for a single person.

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