Marginal Deduction Rates

HC Deb 14 January 1994 vol 235 cc297-8W

Ms Harman

To ask the Secretary of State for Social Security if he will provide the latest estimates for the numbers of people with marginal net income deduction rates at or above 50 per cent., 60 per cent., 70 per cent., 80 per cent., 90 per cent. and 100 per cent. in 1992–93, 1993–94 or 1994–95, on the same basis as figure 19 on page 11 of the social security departmental report, February 1993.

Mr. Burt

The available information is in the table. Estimates for 1994–95 are not available.

The main reason for the increase in the numbers facing high marginal deduction rates is the effect of a reduction in the number of hours worked per week required to qualify for family credit from 24 to 16 which was introduced in April 1992. This has widened the scope of the analysis to include people working 16 to 24 hours per week who would have previously been in receipt of income support and faced deduction rates of 100 per cent.

Numbers (thousands) with marginal deduction rates at or above certain levels1
	1992–932	1993–943
100 per cent, and over	0	0
90 per cent, and over	75	105
80 per cent, and over	250	215
70 per cent, and over	500	575
60 per cent, and over	510	590
50 per cent, and over	510	595

Notes:

¹Calculated for benefit units where at least one partner works 16 or more hours per week. Estimates are cumulative and rounded to the nearest 5,000.

²Projections based on 1986, 1987 and 1988 family expenditure Survey.

³Projections based on 1989, 1990 and 1991 family expenditure Survey.