§ Mr. CousinsTo ask the Secretary of State for Social Security what is the marginal tax benefit withdrawal rate on additional gross income for a person paying standard rate income tax and national insurance and receiving both a rent rebate and community charge benefit as from April 1991; and what is the tax benefit withdrawal rate for each element.
§ Mr. JackThe 1988 social security reforms and subsequent tax and national insurance changes eliminated the highest marginal deduction rates and it is now virtually impossible to find oneself worse off as a result of an increase in gross pay.
Someone in work will normally have standard deduction rates of 25 per cent. for income tax and 9 per cent. for national insurance. The marginal deduction rate for such a person paying standard rate income tax, national insurance and receiving both a rent rebate and community charge benefit as from April 1991 is 87 per cent.
The marginal deduction rate on total gross pay for each element is:
Per cent. Tax 25 National insurance 9 Housing benefit 43 Community charge benefit 10