§ Mr. MacShaneTo ask the Chancellor of the Exchequer what would be the full year cost of giving two-parent families an additional working families tax credit of £48.80; and if he will publish a table which shows what, if that were done, would be the equivalised net income of a single-earner married couple with two children aged four and six years as a percentage of a single adult's net income if in each case the gross pre-tax income was (i) £150, (ii) £200, (iii) £250, (iv) £300, (v) £350 and (vi) £400 respectively. [44512]
§ Dawn Primarolo[holding answer 8 June 1998]: It is estimated that the additional cost of giving two-parent families an additional credit of £48.80 within the WFTC is around £3 billion (1998–99 prices).
The following table shows the net income (after income tax, including WFTC, NICs and child benefit), and equivalised net income, of a single earner married couple with two young children, at different levels of gross income, with an additional £48.80 of basic WFTC.
Single earner married couple (2 children aged 4 and 6) Gross income Net income (after taxes and benefits) Equivalised net income 150 269.88 194.16 200 285.14 205.14 250 300.22 215.98 300 315.29 226.83 350 330.37 237.67 400 345.44 248.52 For comparison, the following table shows the net income of a single person.
Single person, no children Gross income Net income (after taxes and benefits) Equivalised net income 150 127.53 209.07 200 161.44 264.65 250 194.94 319.57 300 228.44 374.48 350 261.94 429.40 400 295.44 484.32 Equivalised net income of a single earner married couple with two children, as a percentage of a single adult's net equivalised income, is as shown:
Gross income Percentage 150 92 200 78 250 68 300 61 350 55 400 51 The figures include the effect of Budget measures taking effect in 1999–2000, although at 1998–99 levels of tax and benefits.
134WThe data assume that the earner in the household is working over 30 hours a week for Working Families Tax Credit purposes; that earnings are from employment; and that there are no other sources of income.
The standard McClements scales have been used to determine equivalised income. This is the same process that is used in the DSS's Households Below Average Income publication.
At some levels of earnings, this family may also be entitled to housing benefit and council tax benefit. However, as this will depend upon the composition of the housing costs (between mortgage payments, council tax, and rent) housing benefit and council tax benefit have been left out of these figures.