§ Mr. MeacherTo ask the Secretary of State for Social Security if he will estimate the number of couples with children and lone parent households, respectively, who for the period April 1992 to March 1993 will come on to
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§ Miss WiddecombeThe information requested is shown in the table.
family credit and who, but for the change in definition of full-time work from 24 to 16 hours for income support recipients, would have been eligible for income support; if he will give an estimate of how much his Department will save as a result; and if he will estimate the number of childless households no longer eligible for such help because they will no longer be eligible for income support.
§ Mr. Jack[holding answer 27 February 1992]: About 45,000 families with children currently claiming income support and working between 16 and 24 hours a week up to 7 April 1992 will be eligible to claim family credit, if they so choose, because of the change in the hours rule from 24 to 16 hours a week. Of these, 30,000 families—including 25,000 lone parents—are expected to be better off on family credit, and some 15,000 families with children are likely to have their family credit topped up with income support to maintain the level of their income. In addition, about 15,000 people without children, who are working 16 to 24 hours a week at the point of change will be able to remain on income support as at present.
It is not possible to estimate how many new potential claimants would have been entitled to income support during 1992–93 if the remunerative work rule had remained at 24 hours a week, because the effect of behavioural changes cannot be predicted. However, it is expected that the substantial majority of families with children will be better off on family credit because of the more generous rules for treating earnings and, from 7 April, the introduction of a disregard of the first £15 a week of any maintenance received in family credit, housing benefit and community charge benefit.
We also expect that up to 35,000 families with children—30,000 of them lone parents—who are already working between 16 and 24 hours a week but earning too much to get income support will qualify for family credit. In the longer term, we expect that the lower hours threshold will encourage many others to take up work of at least 16 hours or increase their hours so as to qualify for family credit.
As a result of these changes more benefit rather than less will be paid. Together with the increasing numbers claiming family credit, the changes will lead to an increase in family credit expenditure, from an expected outturn of £617 million in 1991–92 to an estimated £850 million in 1992–93.