§ Mr. Cousinsasked the Secretary of State for Social Services if he will set out the changes in housing benefit taper rates since the introduction of housing benefit in 1983, together with the taper rates proposed for April 1988; and if he can estimate the rate of withdrawal of benefit for each additional £1 of income for (a) a non-taxpayer and (b) a taxpayer at the standard rate.
§ Mr. PortilloThe table shows the tapers above the needs allowance since November 1982 when housing benefit was first introduced on a partial start basis, together with the marginal tax rate (MTR) for a non-taxpayer and someone paying standard rate income tax only, assuming they are getting help with both rent and rates. There have been no adjustments to the tapers below the needs allowance since the introduction of housing benefit.
The proposed tapers of 65 per cent. (for rents) and 20 per cent. (for rates) under the reformed scheme next April cannot be directly compared with the current ones because they will operate net rather than gross income. For someone paying standard rate income tax only, the proposed tapers are equivalent to approximately 47 per cent. (for rents) and 15 per cent. (for rates) on gross income, giving a total MTR of approximately 89 per cent.; for a non-taxpayer the total MTR would be 85 per cent.