§ Mr. Michael Brownasked the Secretary of State for Social Services (1) in estimating the cost of abolishing the earnings rule, what assumption was made about the number of people under retirement age who are in work and who would continue in work only if the rule were abolished;
(2) in estimating the cost of abolishing the earnings rule, what assumption was made about the 60,000 pensioners outside the earnings rule who limit their earnings because of the earnings rule.
§ Mr. RossiMy right hon. Friend gave his revised estimated cost of abolishing the earnings rule for retirement pensioners in his reply to my hon. Friend the Member for Rochester and Chatham (Mrs. Fenner) on 7 August 1980.—[Vol 990 c.283].
For the purpose of that estimate it was assumed that those limiting their earnings because of a misunderstanding of the earnings rule would behave in the same way as others limiting their earnings because of the rule. The broad overall effect was taken as 10 per cent. of working pensioners in the affected age ranges increasing their earnings from average part-time to average full-time earnings, and 1 per cent. of non-working pensioners taking up part-time work.
The available evidence suggests that there are very few people who give up work at pension age solely because of the earnings rule. This effect would be covered by the 1 per cent. assumption referred to above.