§ Mr. Frank FieldTo ask the Secretary of State for Social Security what would be(a) the gross cost and (b) the net cost, after income support and housing benefit savings, of making eligibility for short-term national insurance benefit conditional on (i) 25 times that year's lower earnings limit only and (ii) 50 times that years' lower earnings limit only; and if he will estimate the additional number who could become eligible for (1) unemployment and (2) invalidity benefit on the basis of their sickness benefit entitlement.
§ Mr. Roger Evans[holding answer 23 February 1995]: The estimated cost and difference in numbers of people becoming entitled to unemployment benefit and incapacity benefit as a result of changing the contribution conditions to requiring a claimant to have paid or have been credited with class I national insurance contributions on earnings of at least:
are set out in the tables. Attention is drawn to table 1 note (v) and table 2 notes (v) and (vii). The estimates make no allowances for the uncertain number of people currently not claiming the benefits who would do so under new contribution conditions. They should therefore be treated with great caution.
- (i) 25 times the lower earnings limit in the last tax year before the benefit year in which the claim is made;
- or
- (ii) 50 times the lower earnings limit in the last tax year before the benefit year in which the claim is made;
Table 1—Result of changes in national insurance contribution conditions on claims to and cost of unemployment benefit Option (i) Option (ii) Gross cost (£ million) 230 115 Net cost (£ million) 35 20 Increase in number of unemployment benefit recipients 85,000 45,000 Notes:
The following assumptions have been made:
1. Costs have been rounded to the nearest £5 million and caseloads to the nearest 5,000.
2. Calculations are based on an unemployment benefit caseload of 500,000.
3. Calculations are made using current prices and benefit levels, and data taken from the 1992–93 national insurance recording system database, the 1993 Annual Statistical Enquiry and the 1990–91–92 Family Expenditure Surveys.
624W4. Some people who would satisfy revised contribution conditions may be disallowed, or disqualified for, unemployment benefit on other grounds (eg leaving work voluntarily, misconduct, compensation from an employer).
5. The figures are an under-estimate as no allowance can be made for people who sign as unemployed for the first time as a result of the change in the contribution conditions.
Table 2—Result of changes in national insurance contribution conditions on claims to and cost of incapacity benefit Option (i) Option (ii) Gross cost (£ million) 1,400 550 Net cost (£ million) 250 100 Long-term increase in number of incapacity benefit recipients 400,000 150,000 Notes:
The following assumptions have been made:
1. These are estimated figures of the long term effect. Costs have been rounded to the nearest £50 million and caseloads to the nearest 50,000.
2. Calculations have been made using current prices and benefit levels, and data taken from the 1992–93 national insurance recording system data-base, and the 1993 Annual Statistical Enquiry.
3. New entitlements come from either the current severe disability allowance caseload or from those, registering as sick, who are less than 80 per cent. disabled and who currently have insufficient contributions.
4. Allowance has been made of the effect of the incapacity benefit changes and the expected effect of the new medical test.
5. The new contribution conditions in the lower rate of short-term incapacity benefit are assumed to apply to long-term incapacity benefit. This means that all those who get lower rate of short-term incapacity benefit will move on to long-term incapacity benefit as long as their incapacity continues.
6. The figures are an under-estimate as no allowance can be made for people registering as sick for the first time as a result of the change in the contribution conditions.
7. These estimates are highly uncertain and should be treated with extreme caution.