§ Mr. McTaggartasked the Secretary of State for Social Services how the income of families with two children under 5 years of age on supplementary benefit compares with the average income of those at work in percentage terms in the three latest available years.
§ Mr. NewtonThe information is as follows:
per cent. November 1979 55.3 November 1980 58.7 November 1981 61.1 Notes:
1. Supplementary benefit has been calculated as the appropriate scale rate, plus an average rent addition, and an age related heating addition.
2. Average income has been calculated as the estimated average gross weekly earnings of men (aged 21 and over) derived from the April New Earnings Survey using a three month moving average of the whole economy index, less tax and NI contributions at the non-contracted out rate, plus child benefit.
3. The November 1981 figure is provisional.
187W
§ Mr. Pawseyasked the Secretary of State for Social Services whether he will give examples of the effects on working families of the current year's income tax and social security changes.
§ Mr. FowlerThe effects on hypothetical families of the changes in income tax and social security benefits and contributions, which are due to take effect in 1982, are outlined below. The table shows the total income support available at three different levels of earnings in the week beginning 22 November 1982. This is the first week in which the higher rates of benefit announced in the Budget and uprating statements on 9 and 10 March are due to be paid. The income tax and contribution changes are effective from 6 April 1982.
Total income support is defined for this purpose as in the published tax/benefit model tables, that is, as gross earnings, less income tax, social security contributions, travel-to-work expenses and, for householders, rent and
188W
Total income support for people in work in illustrative circumstances November 1981 November 1982 (projected) Percentage change November 1981–82 £ p £ P Married couple with two children (age 4 and 6) Half average male earnings 65.31 71.93 10.0 Two-thirds average male earnings 71.24 76.53 7.5 Average male earnings 95.08 99.51 4.5 Married couple with four children (aged 4, 6, 11, and 16) Half average male earnings 89.02 98.35 10.5 89.88 8.5 Two-thirds average male earnings* (83.13) 97.59 (17.5) Average male earnings 105.58 111.21 5.5 Lone parent with two children (aged 4 and 6) Half average female earnings 68.61 75.84 10.5 Two-thirds average female earnings 67.91 74.93 10.5 Average female earnings 72.80 78.32 7.5 Single non-householder Half average male earnings 50.69 53.85 6.0 Two-thirds average male earnings 66.40 70.48 6.0 Average male earnings 97.84 103.73 6.0 * The married couple with four children and on two thirds average earnings would receive free school meals automatically by virtue of the receipt of FIS in November 1982, but only qualify on the discretionary low income entitlement in November 1981. The figures in brackets refer to the case where the local authority provides free meals to those on "passport" benefits (supplementary benefit and FIS) only. Notes on the Table 1. The illustrative families (and single man) shown in the table have no income other than the man's (or lone parent's) earnings and that from social security benefits, of which they are assumed to claim their full entitlements. Average earnings refer to those for all full-time adult male employees, except in the case of the lone parent which are based on the female equivalent. 2. They have only the personal tax allowances, and are not contracted out of the state pensions scheme. Travel-to-work expenses are an estimate of the average for householders using public transport to get to work. 3. The value of help from free prescriptions etc has not been quantified, but the value of free welfare milk and school meals has been included. It has been assumed that families live in areas where local authorities use their discretionary powers to provide free school meals on an income scale equivalent to the statutory scale existing at November 1979, appropriately uprated (but where year to year changes would be significantly different, figures assuming provision by "passport" only are also shown). 4. For the families with children, rents paid are assumed to be at the national average for a three-bedroomed council house, with corresponding general rates, and water rates equivalent to the estimated average for all householders. 5. For the purposes of the projection to November 1982, it has been assumed that between November 1981 and November 1982; (a) average earnings will have risen by 7.5 per cent; (b) the average value of a free school meal will have risen from 45p to 50p; (c) rents will have risen by £2.50, general rates by 15 per cent. and average water rates from £1.15 to £1.30; (d) the housing needs allowance and earnings disregard will have been uprated on an equivalent formula to recent upratings; (e) average travel-to-work expenses will have risen from £4.40 to £5.05; and that (f) the price of milk remains at the current level. rates: plus child benefit, family income supplement, rent and rates rebates, and the value of free school meals and welfare milk, as appropriate.
The 1982 changes announced in the Budget and uprating statements will increase the incomes of those in work by raising tax thresholds and, from November 1982, increasing child benefit, one parent benefit and family income supplement. As against that, employees' social security contributions have increased by 1 per cent. Total income support will also be affected by the rate of growth in earnings; increases in rents and rates; and the uprating of housing benefits in November 1982.
The table compared, for some of the illustrative family types used in the tax/benefit models tables, total income support at November 1981 with estimates for November 1982. It should be stressed that these examples relate only to particular illustrative situations described and have no general application. They should not be quoted out of context and without stating the assumptions on which they are based. These assumptions are included in the notes which follow the table.