§ Mr. KirkwoodTo ask the Secretary of State for Social Services why it is assumed under the family credit scheme that, on between £3,000 and £6,000 of capital, each £250 of capital will provide an income of £1 a week; and whether this rule will apply if it can be proved that such an income is not forthcoming.
§ Mr. ScottThe range of tariff income assumed in the family credit scheme — and in the other new income related benefits—on capital between £3,000 and £6,000 is not intended to represent a commercial rate of return. Indeed, at the lower end of the range, an assumed income of £1 a week on savings of £3,250 represents an actual rate of only 1.6 per cent. This provision seeks to strike a balance between encouraging thrift and the proper use of public funds, and we consider that those with savings between £3,000 and £6,000 can reasonably be expected to make a progressive contribution. The rule will apply regardless of the manner in which capital is invested.