Spending Power (Hansard, 28 February 1989)

§ Mr. Peter Lloyd

[holding answer 22 December 1988]: The information requested is set out in the tables. They compare the post-reform position in April 1988 not with all actual pre-form cash situation but with a hypothetical position which might have occurred, had the previous structure continued and been uprated on the assumptions in "Impact of the Reformed Structure of Income Related Benefits" (October 1987).

In addition, it should be noted that although the comparisons are based on average local authority housing charges in south Tyneside they do not necessarily reflect either the wide variety of rents and domestic rates that people in the borough actually pay or real families' circumstances and their housing arrangements. Finally, the comparisons take no account of the housing benefit transitional cash protection announced on 27 April.

157W

New benefit system from April 1988
South Tyneside LA
Married couple with 2 children aged 4 and 6
Earnings head	Tax	NI	Family credit	Child benefit	Rent	Rent rebate	Rates	Rate rebate	Fares to work	Net inc. after housing costs	Difference between systems
60.00	0.00	3.00	40.32	14.50	17.32	2.56	8.08	0.67	5.85	83.80	-10.97
70.00	0.00	4.90	34.65	14.50	17.32	0.98	8.08	0.00	5.85	83.98	-12.24
80.00	1.22	5.60	28.99	14.50	17.32	0.00	8.08	0.00	5.85	85.42	-12.23
90.00	3.92	6.30	24.37	14.50	17.32	0.00	8.08	0.00	5.85	87.40	-10.20
100.00	6.62	7.00	19.75	14.50	17.32	0.00	8.08	0.00	5.85	89.38	-8.17
110.00	9.32	9.90	16.67	14.50	17.32	0.00	8.08	0.00	5.85	90.70	-4.18
120.00	12.02	10.80	12.19	14.50	17.32	0.00	8.08	0.00	5.85	92.62	-0.23
130.00	14.72	11.70	7.71	14.50	17.32	0.00	8.08	0.00	5.85	94.54	-0.11
140.00	17.42	12.60	3.23	14.50	17.32	0.00	8.08	0.00	5.85	96.46	+0.07
150.00	20.12	13.50	0.00	14.50	17.32	0.00	8.08	0.00	5.85	99.63	0.00
160.00	22.82	14.40	0.00	14.50	17.32	0.00	8.08	0.00	5.85	106.03	0.00
170.00	25.52	15.30	0.00	14.50	17.32	0.00	8.08	0.00	5.85	112.43	0.00

Old benefit system at hypothetical rates April 1988
South Tyneside LA
Married couple with 3 children aged 3, 8 and 11
Earnings head	Tax	NI	FIS	Child benefit	Rent	Rent rebate	Rates	Rate rebate	Fares to work	Free school meals	Free welfare milk	Net inc. after housing costs
60.00	0.00	3.00	32.90	21.75	17.32	16.84	8.08	5.98	5.85	5.10	1.83	110.15
70.00	0.00	4.90	30.50	21.75	17.32	14.94	8.08	5.37	5.85	5.10	1.83	113.34
80.00	1.22	5.60	25.50	21.75	17.32	13.69	8.08	4.97	5.85	5.10	1.83	114.77
90.00	3.92	6.30	20.50	21.75	17.32	12.44	8.08	4.57	5.85	5.10	1.83	114.72
100.00	6.62	7.00	15.50	21.75	17.32	11.19	8.08	4.17	5.85	5.10	1.83	114.67
110.00	9.32	9.90	10.50	21.75	17.32	9.80	8.08	3.68	5.85	5.10	1.83	112.19
120.00	12.02	10.80	5.50	21.75	17.32	8.15	8.08	3.03	5.85	5.10	1.83	111.29
130.00	14.72	11.70	0.50	21.75	17.32	6.50	8.08	2.38	5.85	5.10	1.83	110.39
140.00	17.42	12.60	0.00	21.75	17.32	3.36	8.08	1.14	5.85	5.10	0.00	110.08
150.00	20.12	13.50	0.00	21.75	17.32	0.00	8.08	0.00	5.85	5.10	0.00	111.98
160.00	22.82	14.40	0.00	21.75	17.32	0.00	8.08	0.00	5.85	0.00	0.00	113.28
170.00	25.52	15.30	0.00	21.75	17.32	0.00	8.08	0.00	5.85	0.00	0.00	119.68

New benefit system from April 1988
South Tyneside LA
Married couple with 3 children aged 3, 8 and 11
Earnings head	Tax	NI	Family credit	Child benefit	Rent	Rent rebate	Rates	Rate rebate	Fares to work	Net inc. after housing costs	Difference between systems
60.00	0.00	3.00	51.72	21.75	17.32	0.90	8.08	0.00	5.85	100.12	-10.03
70.00	0.00	4.90	46.05	21.75	17.32	0.00	8.08	0.00	5.85	101.65	-11.69
80.00	1.22	5.60	40.39	21.75	17.32	0.00	8.08	0.00	5.85	104.07	-10.70
90.00	3.92	6.30	35.77	21.75	17.32	0.00	8.08	0.00	5.85	106.05	-8.67
100.00	6.62	70.0	31.15	21.75	17.32	0.00	8.08	0.00	5.85	108.03	-6.64
110.00	9.32	9.90	28.07	21.75	17.32	0.00	8.08	0.00	5.85	109.35	-2.84
120.00	12.02	10.80	23.59	21.75	17.32	0.00	8.08	0.00	5.85	111.27	-0.02
130.00	14.72	11.70	19.11	21.75	17.32	0.00	8.08	0.00	5.85	113.19	+2.80
140.00	17.42	12.60	14.63	21.75	17.32	0.00	8.08	0.00	5.85	115.11	+5.03
150.00	20.12	13.50	10.15	21.75	17.32	0.00	8.08	0.00	5.85	117.03	+5.05
160.00	22.82	14.40	5.67	21.75	17.32	0.00	8.08	0.00	5.85	118.95	+5.67
170.00	25.52	15.30	1.19	21.75	17.32	0.00	8.08	0.00	5.85	120.87	+1.19

Old benefit system at hypothetical rates April 1988
South Tyneside LA
Single person with 2 children aged 4 and 6
Earnings head	Tax	NI	FIS	Child benefit	Rent	Rent rebate	Rates	Rate rebate	Fares to work	Free school meals	Free welfare milk	Net inc. after housing costs
60.00	0.00	3.00	28.70	19.40	17.32	14.58	8.08	5.25	5.85	2.55	1.83	98.06
70.00	0.00	4.90	23.70	19.40	17.32	13.33	8.08	4.85	5.85	2.55	1.83	99.51
80.00	1.22	5.60	18.70	19.40	17.32	12.08	8.08	4.45	5.85	2.55	1.83	100.94
90.00	3.92	6.30	13.70	19.40	17.32	10.83	8.08	4.05	5.85	2.55	1.83	100.89
100.00	6.62	7.00	8.70	19.40	17.32	9.32	8.08	3.49	5.85	2.55	1.83	100.42
110.00	9.32	9.90	3.70	19.40	17.32	7.67	8.08	2.84	5.85	2.55	1.83	97.52
120.00	12.02	10.80	0.00	19.40	17.32	5.59	8.08	2.02	5.85	2.55	0.00	95.49

158W 159W

Earnings head	Tax	NI	FIS	Child benefit	Rent	Rent rebate	Rates	Rate rebate	Fares to work	Free school meals	Free welfare milk	Net inc. after housing costs
130.00	14.72	11.70	0.00	19.40	17.32	2.29	8.08	0.72	5.85	2.55	0.00	97.29
140.00	17.42	12.60	0.00	19.40	17.32	0.00	8.08	0.00	5.85	2.55	0.00	100.68
150.00	20.12	13.50	0.00	19.40	17.32	0.00	8.08	0.00	5.85	0.00	0.00	104.53
160.00	22.82	14.40	0.00	19.40	17.32	0.00	8.08	0.00	5.85	0.00	0.00	110.93
170.00	25.52	15.30	0.00	19.40	17.32	.000	8.08	0.00	5.85	0.00	0.00	117.33

New benefit system from April 1988
South Tyneside LA
Single person with 2 children aged 4 and 6
Earnings head	Tax	NI	Family credit	Child benefit	Rent	Rent rebate	Rates	Rate rebate	Fares to work	Net inc. after housing costs	Difference between systems
60.00	0.00	3.00	40.32	19.40	17.32	0.00	8.08	0.00	5.85	85.47	-12.59
70.00	0.00	4.90	34.65	19.40	17.32	0.00	8.08	0.00	5.85	87.90	-11.61
80.00	1.22	5.60	28.99	19.40	17.32	0.00	8.08	0.00	5.85	90.32	-10.62
90.00	3.92	6.30	24.37	19.40	17.32	0.00	8.08	0.00	5.85	92.30	-8.59
100.00	6.62	7.00	19.75	19.40	17.32	0.00	8.08	0.00	5.85	94.28	-6.14
110.00	9.32	9.90	16.67	19.40	17.32	0.00	8.08	0.00	5.85	95.60	-1.92
120.00	12.02	10.80	12.19	19.40	17.32	0.00	8.08	0.00	5.85	97.52	+2.03
130.00	14.72	11.70	7.71	19.40	17.32	0.00	8.08	0.00	5.85	99.44	+2.15
140.00	17.42	12.60	3.23	19.40	17.32	0.00	8.08	0.00	5.85	101.36	+0.68
150.00	20.12	13.50	0.00	19.40	17.32	0.00	8.08	0.00	5.85	104.53	0.00
160.00	22.82	14.40	0.00	19.40	17.32	0.00	8.08	0.00	5.85	110.93	0.00
170.00	25.52	15.30	0.00	19.40	17.32	0.00	8.08	0.00	5.85	117.33	0.00

Benefit system from April 1988
Assumptions as in "Impact of reformed structure of income related benefits" October 1987.
Average local authority rent and rates for South Tyneside lone mother with two children aged 4 and 6
	Income Support	Rent	Rates	Housing Benefit	CHB	FSM	FWM	Net weekly spending power	Difference between systems
a. Not working after one year on benefit	45.35	17.32	8.08	23.84	19.40	2.55	1.83	66.27	-1.88

	Income support	Earnings	Tax	NI	Fares to work	Rent	Rates	Housing Benefit	CHB	FSM	FWM	Net weekly spending power	Difference between systems
b. Working part time earning £20	40.35	20.00	0.00	0.00	2.92	17.32	8.08	23.84	19.40	2.55	1.83	78.35	+8.16
c. Working part time earning £40	20.35	40.00	0.00	0.00	2.92	17.32	8.08	23.84	19.40	2.55	1.83	78.35	+6.70

Old tax and benefit system—assuming average local authority rent and rates for South Tyneside and a simple rescaling of April 1987 benefits to April 1988
Lone mother with 2 children aged 4 and 6
	(a)	(b)	(c)
	Not working after one year on benefit	Working part time earning £20	Working part time earning £40
	£	£	£
Supplementary benefit	45.93	30.89	14.35
Earnings	—	20.00	40.00
Tax	—	0.00	0.00
NI	—	0.00	2.00
Fares to work	—	2.92	2.92
Rent	17.32	17.32	17.32
Rates	8.08	8.08	8.08
Housing benefit	23.84	23.84	23.84
CHB	19.40	19.40	19.40
FSM	2.55	2.55	2.55
FWM	1.83	1.83	1.83
Net weekly spending power	68.15	70.19	71.65

160W