§ Mr. GerrardTo ask the Secretary of State for Social Security (1) what estimates his Department has made for the total number of people classified as falling within the benefits poverty trap in(a) May 1992, (b) May 1993 and (c) the latest available date;
(2) what estimates his Department made for the total number of people classified as falling into the benefits poverty trap in (a) May 1992, (b) May 1993 and (c) the latest available date.
§ Mr. BurtThe term "poverty trap" is often used to describe a situation where, because of a combination of tax and national insurance deductions, and the withdrawal of income-related benefits, a person working on low pay receives little or no increase in income when earnings rise.
The combined rate at which tax and national insurance are deducted from earnings and income-related benefits are withdrawn is known as the marginal deduction rate. Estimates of the numbers with marginal deduction rates at 200W or above certain rates in 1992–93 and 1993–94 can be found in the "Social Security Departmental Report", Cm. 2513, published in March this year. A copy is in the Library.