§ Ms. PrimaroloTo ask the Secretary of State for Social Security if he will provide illustrative examples of people who would be(a) better off and (b) worse off claiming family credit once the condition of entitlement is reduced from 24 hours to 16 hours.
§ Mr. Jack[holding answer 11 February 1991]: The extent to which people will be better off claiming family credit as a result of the change in the hours threshold for family credit will vary according to factors such as the hours worked, hourly rates of pay, family size and age of children.
For example, based on the methods and assumptions in the DSS tax benefit model tables, a lone parent with one child aged three years and weekly earnings from part-time employment of around £40 for between 16 and 24 hours work would experience an increase in net income, after paying rent and community charge, as a result of being eligible for family credit under the new rule.
Similarly, a lone parent with one child aged eight years and weekly earnings of around £70 for between 16 and 24 hours work who does not currently qualify for income support would be better off as a result of becoming eligible for family credit.
There will also be a number of people who are currently on income support but not in work but who, as a result of the change, will decide to boost their incomes by taking a job working 16 hours or more which will enable them to qualify for family credit, and thus be better off.
No existing beneficiaries will be worse off as a result of the change, since transitional protection will ensure that there is no loss of benefit for those already on income support and working between 16 and 24 hours at the point of change. However, for some claiming thereafter, for example a couple with a large family and a large mortgage, the combination of earnings from 16 and 24 hours work plus family credit will be less than they would have received from 16 and 24 hours work plus income support.