HC Deb 20 July 1994 vol 247 cc257-8W
Sir David Knox

To ask the Secretary of State for Social Security, pursuant to his answer of 6 July,Official Report, columns 227–32, if he will now include figures showing for April and October the effects of the new child care disregard for a lone mother with two children aged four and six years working part time for 24 hours earning £80 a week.

Mr. Burt

The information is in the table. The child care disregard will be introduced in October and will apply to the calculation of housing benefit, council tax benefit and disability working allowance as well as family credit. Up to £40 of child care costs for children under 11 will be disregarded against earnings, provided that care is arranged with a registered childminder or nursery.

It should be noted that the child care costs, specified in accordance with the reply I gave to my hon. Friend on 6 July at column 227–32, are significantly higher than those typically encountered at the level of earnings specified. Recent research' shows that the average weekly child care costs of working lone parents are £24.60 per week. 1 "Families, work, and Benefit" (Policy Studies Institute, June 1993).

Notes:

1. The family is assumed to live in council property appropriate to their size and pay estimated average rent and council tax.

2. The family is assumed to have no capital and take up entitlement to One Parent Benefit and all income-related benefits.

Lone Mother with 2 children aged 4 and 6 working part-time for 24 hours earning £80 per week with child care costs of £40
Child Care allowance = £40
Position at April 1994 £ Position at October 1994 £
Gross earnings 80.00 80.00
Tax 0.00 0.00
National Insurance 3.44 3.44
Take home pay 76.56 76.56
Family credit 63.30 66.70
Child benefit 24.60 24.60
Rent 36.42 36.42
Rent rebate 9.67 33.46
Council tax 8.30 8.30
Council tax benefit 0.07 7.39
Child care costs 40.00 40.00
Total net income 174.20 208.71
Net income after rent and council tax 129.48 163.99
Net income after rent, Council tax and child care costs 89.48 123.99