§ Mr. MeacherTo ask the Secretary of State for Social Security what number and proportion of people affected by the proposed 20 per cent. income tax lower rate will lose benefit as a result.
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§ Mr. JackOn the introduction of the 20 per cent. income tax rate, all those receiving income-related benefits and who pay tax will be better off. In time the increased net earnings of those eligible for income-related benefits will result in the normal reductions in benefit levels which occur when net earnings are increased. The complex interaction of benefit upratings, tax changes and changes in personal circumstances at April 1992 make it difficult to determine with precision the number of people who will be affected, but we estimate that individual benefit levels will be reduced for around 1 million people out of the 25 million people who will benefit from the lower tax band.