HC Deb 30 October 1985 vol 84 cc577-80W
Mrs. Beckett

asked the Secretary of State for Social Services what would be (a) the estimated cost and (b) the estimated gains and losses, by income band, of the introduction of a single taper scheme based on net income and with rent tapers of (i) 35p, (ii) 40p, (iii) 45p and (iv) 50p, and rate tapers of half the rent taper.

Mr. Newton

[pursuant to his reply, 5 March 1985, c. 515]: The estimated increase in expenditure of the net income housing benefit schemes, based on the assumptions given in the notes below, would be as follows:

Rent taper Rates taper Increase in expenditure
Percentage Percentage (£ million per annum)
(i) 35 17.5 340
(ii) 40 20 160
(iii) 45 22.5 10
(iv) 50 25 -100

The estimated gains and losses by income bands in relation to the current needs allowances would be as follows:

Size of weekly gain/loss Below Above Total
£ More than £20.00 £20.00 to £10.00 £10.00 to £0.00 £0 to £10.00 £10.00 to £20.00 £20.00 to £30.00 £30.00 to £40.00 £40.00+
4.01 to 5.00 0 0 30 20 10 — 0 0 60
5.01 + 0 — 10 20 20 10 0 — 60
Total — 50 540 450 420 280 130 80 1,940
(iii) Rent taper45 per cent., rates taper 22½per cent.
Gainers
0.01 to 1.00 20 50 230 140 50 20 10 10 530
1.01 to 2.00 10 30 150 70 10 10 10 10 310
2.01 to 3.00 — 20 100 40 20 10 — 10 200
3.01 to 4.00 10 20 100 20 10 10 — 10 170
4.01 to 5.00 — — 40 10 10 10 10 10 80
5.01 + — 30 100 40 10 20 20 40 240
Total 40 140 720 330 110 70 50 80 1,550
Losers
0.01 to 1.00 — 20 280 180 120 50 40 30 730
1.01 to 2.00 0 10 170 160 230 130 80 40 830
2.01 to 3.00 0 10 30 70 100 100 30 20 360
3.01 to 4.00 0 — 20 50 60 20 — 10 170
4.01 to 5.00 0 — 80 20 10 10 — — 120
5.01 + 0 — 20 30 30 20 0 — 90
Total — 50 600 520 540 320 160 100 2,300
(iv) Rent taper 50 per cent., rates taper 25 per cent.
Gainers
0.01 to 1.00 20 50 200 100 20 10 — — 410
1.01 to 2.00 10 30 140 60 20 10 — 10 280
2.01 to 3.00 — 20 110 20 10 10 10 10 170
3.01 to 4.00 10 10 70 10 — 10 10 — 120
4.01 to 5.00 — — 40 10 — — — 10 70
5.01 + — 20 90 30 10 10 10 20 200
Total 40 140 660 230 60 40 30 50 1,260
Losers
0.01 to 1.00 — 10 290 200 80 40 40 30 690
1.01 to 2.00 0 30 170 170 190 120 70 50 800
2.01 to 3.00 0 10 70 90 120 100 30 20 440
3.01 to 4.00 0 — 30 70 100 40 30 10 280
4.01 to.5 00 0 — 30 30 50 25 — — 130
5.01 + 0 — 70 60 40 30 — 10 220
Total — 50 660 620 580 350 170 110 2,550

Notes:

1. The estimates are derived from the DHSS housing benefits computer simulation model for standard housing benefit with the following adjustments to the standard parameters as at November 1984:

a. Needs allowances — set at the appropriate long-term supplementary benefit scale rate plus £2 eg single person £37.70, couple/lone parent £59.10. The pensioner addition is assumed to be nil, but the dependent child addition is unchanged.

b. 100 per cent. starting point—the starting point for the calculation of benefit, normally 60 per cent. of rent and of rates, is increased to 100 per cent.

c. Tapers—those below the needs allowance become nil whilst those above the needs allowance are set at the levels indicated in each table.

d. Net Income—the level of gross income taken into account is reduced where appropriate by the assumed amount of income tax and national insurance contributions, the latter at the not contracted out rate, on the basis that income remains constant throughout the tax year. Similarly only the single person's, married man's, wife's earned income, and additional personal tax allowances are assumed to be available.

e. Earnings disregards—both earnings disregards are assumed to be £4.35 the level of the current main earner's disregard once the tax and national insurance elements have been removed.

2. The computer simulation model is based on family expenditure survey data updated and adjusted to reflect actual housing benefit caseloads and expenditure. The estimates are therefore subject to statistical and modelling error. In particular figures of 50,000 or less will be subject to very considerable proportionate error, and individual breakdowns should accordingly be treated with caution.

3. Caseload estimates are rounded to the nearest 10,000. Figures of less than 5,000 are indicated by an asterisk. Some totals may, therefore not be equal to the sum of their component parts. Expenditure estimates are rounded to the nearest £10 million.

4. Certificated caseload and expenditure remain unchanged.

5. The model does not take account of the effects of the different schemes on housing benefit supplement. The expenditure estimates therefore do not take account of changes in HBS.