HC Deb 11 March 1988 vol 129 cc396-7W
Ms. Short

To ask the Secretary of State for Social Services if he will publish tables, similar to those in hisDepartment's tax/benefit model table, showing net weekly spending power for a single childless person aged 18 to 24 years, earning (1) £40, (2) £50, (3) £60, (4) £70, (5) £80, (6) £90, and (7) £100(a) under the existing tax and benefits system and (b) under the benefit system which will be implemented in April, in both cases assuming that the person is paying average local authority rent and rates.

Mr. Scott

The information requested is set out in the tables. It should be noted that the results are hypothetical in two senses. First, the results are based on average local authority rents and rates and do not present a balanced picture reflecting people's actual housing arrangements. Second, the other assumptions used are those set out in "Impact of the Reformed Structure of Income-Related Benefits" October 1987. However, this document, a copy of which is in the Library, suggests that about 20,000 under 25-year-olds will have lower disposable incomes after the payment of housing costs once the reformed structure of income-related benefits is in place. A half of these young people are expected to receive transitional protection so they will not get any less by way of weekly cash benefit.

Existing tax and benefit system Single person aged 18 to 24 years Income and means-tested benefitsfamily head in full time work
Tax threshold = £48.17
Earnings head
40.00 50.00 60.00 70.00 80.00 90.00 100.00
Tax 0.00 0.49 3.19 5.89 8.59 11.29 13.99
National Insurance 0.00 2.50 3.00 4.90 5.60 6.30 7.00
FIS 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Child benefit 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Rent 15.94 15.94 15.94 15.94 15.94 15.94 15.94
Rent rebate 15.94 14.49 11.99 9.47 6.17 2.87 0.00
Rates 8.45 8.45 8.45 8.45 8.45 8.45 8.45
Rate rebate 6.38 5.58 4.78 3.96 2.66 1.36 0.00
Fares to work 5.85 5.85 5.85 5.85 5.85 5.85 5.85
Free school meals 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Free welfare milk 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Net weekly spending power 32.08 36.84 40.34 42.40 44.40 46.40 48.77

New System from April 1988 Single person aged 18 to 24 years Income and means-tested benefitsfamily head in full lime work
Tax threshold = £48.17
Earnings head
40.00 50.00 60.00 70.00 80.00 90.00 100.00
Tax 0.00 0.49 3.19 5.89 8.59 11.29 13.99
National Insurance 0.00 2.50 3.00 4.90 5.60 6.30 7.00
FIS 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Child benefit 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Rent 15.94 15.94 15.94 15.94 15.94 15.94 15.94
Rent rebate 14.90 10.35 5.93 2.42 0.00 0.00 0.00
Rates 8.45 8.45 8.45 8.45 8.45 8.45 8.45
Rate rebate 5.02 3.61 2.25 1.17 0.00 0.00 0.00
Fares to work 5.85 5.85 5.85 5.85 5.85 5.85 5.85
Net weekly spending power 29.68 30.73 31.75 32.56 35.57 42.17 48.77

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