Earnings Rule (Hansard, 9 December 1982)

§ Miss Richardson
asked the Secretary of State for Social Services if he will list each of the social security benefits for which there is an earnings rule, stating in each case (a) the level of earnings at which the rule comes into effect and (b) the effect of the rule on the benefit.

§ Mr. Rossi
The earnings rules which can effect entitlement to social security benefits serve a variety of different purposes and apply in various different ways. Summary information relating to the present rules is set out in the following table.
579W

Benefit Earnings limit or disregard Effect on benefit of earnings

(c) Contributory and non-contributory invalidity pension, unemployability supplement and Category A and C retirement pension (dependant residing with beneficiary) £45.00 a week^* Increase is reduced by 5p for each 10p of wife's dependant's earnings between £45 and £49 and by 5p for each 5p earned over £49

(d) Contributory invalidity pension and unemployability supplement (dependant not residing with beneficiary) £18.85 a week^* No increase payable if wife's/dependant's earnings exceed limit shown

(e) Non-contributory invalidity pension and Category C retirement pension (dependant not residing with beneficiary) £11.80 a week^* No increase payable if wife's/dependant's earnings exceed limit shown

(f) Invalid Care Allowance £11.80 a week^* No increase payable if wife's/dependant's earnings exceed limit shown

(g) Category A retirement pension (dependant under pension age and not residing with beneficiary) £19.70 a week^* No increase if wife's/dependent earnings exceed limit shown

3. Unemployment benefit £2 a day^* No benefit payable if claimant's earnings exceed limit shown

4. Invalid Care Allowance £12 a weeks† No benefit payable if claimant's earnings exceed limit shown

5. (a) Sickness benefit £20 a week^* If work can be regarded as therapeutic ie is undertaken as part of treatment as hospital patients or for similar beneficial cause then earnings permitted up to limit. No entitlement to benefit where work undertaken which is not regarded as therapeutic

(b) Injury benefit £20 a week^*

(c) Invalidity benefit £20 a week^*

(d) Non-contributory invalidity pension £20 a week^*

6. Unemployability supplement £1,040 a year There is no entitlement to the supplement if the claimant is capable of earning more than £,040 a year

7. Supplementary Benefit

(a) Claimant Disregard of £4 earnings a Week‡ Benefit is reduced by £1 for every £1 of claimant's own earnings over £4 a week

(b) Claimant's wife Disregard of £4 earnings a week‡ Benefit reduced by £1 for every £1 of wife's earnings over £4 a week

(c) One-parent families Disregard of £4 a week, plus half the next £16 of earnings‡ Benefit reduced by 50p per £1 of earnings from £4 to £20 a week and by £1 per £1 above £20

8. Family Income Supplement Prescribed amount for a one-child family is £82.50 a week (plus £9 for each additional child) FIS is equal to half the difference between the family's gross income (including earnings, but excluding child benefit) and the prescribed amount, up to a maximum of £21 for a one-child family plus £2 for each additional child

9. FROM APRIL 1983

Housing benefit (for claimants not in receipt of supplementary benefit)

(a) Claimant £18 a week disregards║ Varies with individual circumstances

(b) Spouse £5 a week disregard║ Varies with individual circumstances

Notes:
^* Gross earnings, less national insurance contributions (where relevant) and reasonable work expenses—fares, trade union subscriptions, tools, overalls and so on.
† Gross earnings, less reasonable work expenses—not tax or NI contributions where relevant.
‡Earnings net of tax and NI contributions, and reasonable work expenses.
║ Benefit assessed on gross income, less statutory disregards.

§ Mr. Sainsbury
asked the Secretary of State for Social Services on how many occasions during the last year it has been necessary to require repayment of pensions because of the application of the earnings rule.

§ Mr. Rossi
Statistics are not centrally collated on overpayments to pensioners who are subject to the earnings rule.
580W

§ Mr. Sainsbury
asked the Secretary of State for Social Services what estimate he has made of the cost of administration of the earnings rule.

§ Mr. Rossi
I refer my hon. Friend to my reply to my hon. Friend the Member for Beaconsfield (Mr. Smith) on 29 November 1982.—[Vol. 33, c.82.]
581W

§ Mr. Sainsbury
asked the Secretary of State for Social Services what is the latest estimate he has of the number of pensions which are reduced by reason of the earnings rule.

§ Mr. Rossi
In week commencing 26 July 1982 it is estimated that 4,054 pensioners—2,437 men and 1,617 women—had their pension either reduced or extinguished by the earnings rule because of the level of their own earnings.

Benefit	Earnings limit or disregard	Effect on benefit of earnings
(c) Contributory and non-contributory invalidity pension, unemployability supplement and Category A and C retirement pension (dependant residing with beneficiary)	£45.00 a week^*	Increase is reduced by 5p for each 10p of wife's dependant's earnings between £45 and £49 and by 5p for each 5p earned over £49
(d) Contributory invalidity pension and unemployability supplement (dependant not residing with beneficiary)	£18.85 a week^*	No increase payable if wife's/dependant's earnings exceed limit shown
(e) Non-contributory invalidity pension and Category C retirement pension (dependant not residing with beneficiary)	£11.80 a week^*	No increase payable if wife's/dependant's earnings exceed limit shown
(f) Invalid Care Allowance	£11.80 a week^*	No increase payable if wife's/dependant's earnings exceed limit shown
(g) Category A retirement pension (dependant under pension age and not residing with beneficiary)	£19.70 a week^*	No increase if wife's/dependent earnings exceed limit shown
3. Unemployment benefit	£2 a day^*	No benefit payable if claimant's earnings exceed limit shown
4. Invalid Care Allowance	£12 a weeks†	No benefit payable if claimant's earnings exceed limit shown
5. (a) Sickness benefit	£20 a week^*	If work can be regarded as therapeutic ie is undertaken as part of treatment as hospital patients or for similar beneficial cause then earnings permitted up to limit. No entitlement to benefit where work undertaken which is not regarded as therapeutic
(b) Injury benefit	£20 a week^*
(c) Invalidity benefit	£20 a week^*
(d) Non-contributory invalidity pension	£20 a week^*
6. Unemployability supplement	£1,040 a year	There is no entitlement to the supplement if the claimant is capable of earning more than £,040 a year
7. Supplementary Benefit
(a) Claimant	Disregard of £4 earnings a Week‡	Benefit is reduced by £1 for every £1 of claimant's own earnings over £4 a week
(b) Claimant's wife	Disregard of £4 earnings a week‡	Benefit reduced by £1 for every £1 of wife's earnings over £4 a week
(c) One-parent families	Disregard of £4 a week, plus half the next £16 of earnings‡	Benefit reduced by 50p per £1 of earnings from £4 to £20 a week and by £1 per £1 above £20
8. Family Income Supplement	Prescribed amount for a one-child family is £82.50 a week (plus £9 for each additional child)	FIS is equal to half the difference between the family's gross income (including earnings, but excluding child benefit) and the prescribed amount, up to a maximum of £21 for a one-child family plus £2 for each additional child
9. FROM APRIL 1983
Housing benefit (for claimants not in receipt of supplementary benefit)
(a) Claimant	£18 a week disregards║	Varies with individual circumstances
(b) Spouse	£5 a week disregard║	Varies with individual circumstances