§ Mr. DewarTo ask the Secretary of State for Social Security if he will make a statement on the methods used to calculate the costs of(a) a £10 and (b) £15 disregard of maintenance for parents in receipt of income support.
§ Mr. BurtIn estimating the costs of a maintenance disregard, estimates and assumptions are made in the following areas:
the number of lone parents and step families on income support in any particular year;the proportion of parents with care whose absent parent has a maintenance assessment greater than zero;the proportion of this scheduled maintenance actually being paid or received;the average amount of maintenance disregarded, taking account of the fact that for parents with care receiving less than £10 to £15 maintenance per week,38Wand over was given in the reply to the hon. Member on Friday 17 February, Official Report, columns 872–74.
Many single people in the age group shown will not be liable for rent and council tax. In these cases the net gain from working 16 hours will be £15.05, being the difference between net pay of £51.20 and income support of £36.15. This represents a gain of £1.26 per hour for the additional eight hours work.
To address poor incentives to increase hours of work we are introducing two new measures:
from October 1996 the back-to-work bonus will provide an additional gain of half the value of earnings above the appropriate disregard, £5 for singles, £10 for couples, payable on moving into work of 16 hours or more. For a single person unemployed for a year, the gain from taking work of 16 hours would therefore also be a lump sum of around £400.From October 1996, a new in-work benefit aimed at couples and single people without children will be tested to examine its effects on increasing the gain from work for these groups in the same way as family credit does for families with children.the disregard will equal the amount of maintenance received.