HL Deb 07 June 1999 vol 601 cc131-7WA
Lord Ashley of Stoke

asked Her Majesty's Government:

What are the estimated annual savings arising from proposals in the Welfare Reform and Pensions Bill (a) to change the contribution conditions; and (b) to reduce incapacity benefit levels when the claimant has an occupational pension greater than £50 a week. [HL2553]

The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham)

The proposed modernisation of incapacity benefit for new claimants, with reformed contribution conditions and the taking into account of 50 per cent. of amounts of occupational and personal pensions over £50 a week, will reduce benefit expenditure. It is estimated that it will be reduced by £70 million in the first year (£45 million due to occupational pensions and £25 million to contribution conditions), £255 million in the third year (£190 million due to occupational pensions and £60 million to contribution conditions) and £700 million per year after 10 years (£550 million due to occupational pensions and £150 million to contribution conditions).

Notes:

  1. 1. Figures may not sum due to rounding.
  2. 2. Savings from taking account of occupational and personal pensions allow for overlap with savings from reformed contribution conditions.
  3. 3. 10-year figures are rounded to the nearest £50 million, which reflects the greater degree of uncertainty in the longer term.

Lord Ashley of Stoke

asked Her Majesty's Government:

What is the estimated number and proportion of incapacity benefit claimants also receiving an occupational pension who will lose some or all of their incapacity benefit if the proposals in the Welfare Reform and Pensions Bill are implemented; and what proportion of those who lose all benefit are in the top 40 per cent. of income distribution. [HL2554]

Baroness Hollis of Heigham

No existing incapacity benefit claimants will be affected by this measure.

It is estimated that the number of new claimants affected will be 35,000 in the first year, 120,000 in the third year and 300,000 after 10 years.

It is estimated that fewer than 15 per cent. of the affected cases will receive no incapacity benefit as a result of this measure. The vast majority of these will be in the top 40 per cent of the household income distribution, but the available data do not enable an exact proportion to be calculated.

Lord Ashley of Stoke

asked Her Majesty's Government:

What percentage of incapacity benefit recipients who are also receiving occupational pensions lie in each of the 7th, 8th, 9th and 10th deciles of the income distribution; what is the latest year for which these figures are available; and whether the income figures are adjusted for household size. [HL2527]

Baroness Hollis of Heigham

The information is in the table.

Percentage of Incapacity Benefit Recipients who are also in receipt of an Occupational Pension in the 7th, 8th, 9th and 10th Deciles of the Income Distribution
Income decile Percentage in decile (BHC) Percentage in decile (AHC)
7 14 14
8 14 15
9 and 10 16 20

Source:

Households Below Average Incomes 1996–97.

Notes:

  1. 1. The 7th, 8th, 9th and 10th deciles here represent the top four income deciles.
  2. 2. Deciles 9 and 10 have been combined due to low sample sizes in the survey dataset.
  3. 3. BHC—Income deciles are calculated before adjusting for housing costs; AHC—Income deciles are calculated after adjusting for housing costs.
  4. 4. These figures are estimates for the latest year available, which was the financial year 1996–97. The data have been derived from the Department of Social Security's Households Below Average Income dataset, which in turn is based upon the Family Resources Survey for the same period.
  5. 5 The income figures are based on household income, adjusted for household size and composition. This reflects the commonsense notion that a household of five adults will need a higher income than a person living alone in order to enjoy the same standard of living. The process of adjusting income in this way is known as equivalisation and is needed in order to make sensible income comparisons between households. Each income decile contains 10 per cent. of the population of Great Britain.
  6. 6. The equivalence scales make allowance for factors such as household size and the age of any children but not for any extra costs that people with disabilities may have. Attendance Allowance and Disability Living Allowance, which are paid to help with the extra costs of disability, are included as income in these estimates. However, removing Attendance Allowance and Disability Living Allowance from individuals' income makes little difference to the figures reported here.

Lord Ashley of Stoke

asked Her Majesty's Government:

What percentage of people on state retirement pensions who are also receiving occupational pensions lie in each of the 7th, 8th, 9th and 10th deciles of the income distribution. [HL2528]

Baroness Hollis of Heigham

The information is in the table.

Percentage of State Retirement Pension recipients who are also in receipt of an Occupational Pension in the 7th, 8th, 9th and 10th deciles of the income distribution
Income decile Percentage in decile (BHC) Percentage in decile (AHC)
7 9 10
8 7 10
9 7 8
10 7 9

Source: Households Below Average Income 1996–97.

Notes:

  1. 1. The 7th, 8th, 9th and 10th deciles here represent the top four deciles.
  2. 2. BHC = Income deciles are calculated before adjusting for housing costs; AHC = Income deciles are calculated after adjusting for housing costs.
  3. 3. These figures are estimates for the latest year available, which was the financial year 1996–97. The data have been derived from the Department of Social Security's Households Below Average Income dataset, which in turn is based upon the Family Resources Survey for the same period.
  4. 4. The income figures are based on household income, adjusted for household size and composition. This reflects the commonsense notion that a household of five adults will need a higher income than a person living alone to enjoy the same standard of living. The process of adjusting income in this way is known as equivalisation and is needed in order to make sensible income comparisons between households. Each income decile contains 10 per cent. of the population of Great Britain.

Lord Ashley of Stoke

asked Her Majesty's Government:

What percentage of incapacity benefit recipients lie in each decile of the income distribution. [HL2529]

Baroness Hollis of Heigham

The information is in the table.

Percentage of Incapacity Benefit recipients in each decile of the Income Distribution
Income decile Percentage in decile (BHC) Percentage in decile (AHC)
bottom 8 7
2 12 13
3 18 18
4 16 14
5 13 12
6 10 10
7 9 9
8 8 8
9 and top 8 9

Source:

Households Below Average Income 1996–97.

Notes:

  1. 1 Deciles 9 and I0 have been combined due to low sample sizes in the survey dataset.
  2. 2 Columns may not sum to 100 per cent. due to rounding.
    3. WA 134
  3. 3 BHC = Income deciles are calculated before adjusting for housing costs; AHC = Income deciles are calculated after adjusting for housing costs.
  4. 4 These figures are estimates for the latest year available, which was the financial year 1996–97. The data have been derived from the Department of Social Security's Households Below Average Income dataset, which in turn is based upon the Family Resources Survey for the same period.
  5. 5 The income figures are based on household income, adjusted for household size and composition. This reflects the commonsense notion that a household of five adults will need a higher income than a person living alone in order to enjoy the same standard of living. The process of adjusting income in this way is known as equivalisation and is needed in order to make sensible income comparisons between households. Each income decile contains 10 per cent. of the population of Great Britain.
  6. 6 Whilst incomes are adjusted for household size, and also for factors such as the age of any children, the current equivalence scales do not make any extra allowance for any extra costs that people with disabilities may have.
  7. 7 Other disability benefits, including Attendance Allowance and Disability Living Allowance (both components), are included in "income" in these estimates. Results have also been calculated after removing Disability Living Allowance (both components) and Attendance Allowance from individuals' income. This would reduce the proportion of incapacity benefit recipients in the top half of the income distribution by about 5 or 6 percentage points.

Lord Ashley of Stoke

asked Her Majesty's Government:

What is the income level at the boundaries between the 6th and 7th; the 7th and 8th; the 8th arid 9th; and the 9th and 10th deciles of the income distribution. [HL2531]

Baroness Hollis of Heigham

The information is in the table.

Money Values for Decile Breaks of the Equivalised Income Distribution in April 1998 prices (including self-employed) Net equivalised household income
60th Percentile 70th Percentile 80th Percentile 90th Percentile
Before Housing Costs 294 341 406 521
After Housing Costs 256 299 361 464

Notes:

  1. 1. All figures are estimates and are taken from the Households Below Average Income (HBAI) data set, which is based on the Family Resources Survey (FRS). The FRS does not include Northern Ireland.
  2. 2. The income measure used is weekly net (disposable) equivalised household income (that is to say "actual" income that is adjusted to reflect the composition of the household). Tile figures given are equivalent to the "actual" household income of a couple with no children.
  3. 3. It is standard HBAI practice to give results for income both before and after housing costs, in order to allow for the effect of variations in housing costs between households.
  4. 4. It should be noted that deciles are numbered in ascending order relative to their position from the bottom of the income distribution. For example, the 7th decile would be the 7th decile from the bottom of the income distribution (and therefore the 3rd decile from the top of the distribution).
  5. 5. In the context of the above figures, a decile break is the boundary between consecutive deciles of the income distribution. For example, the 60th percentile represents the income level at the boundary between the 6th and 7th deciles, the 70th percentile the boundary between the 7th and 8th deciles and so on.

Lord Ashley of Stoke

asked Her Majesty's Government:

What was the average income in the latest year for which income distribution figures are available; and in which decile does it fall. [HL2532]

Baroness Hollis of Heigham

The mean value of equivalised income Before Housing Costs (BHC), including the self-employed, lies in the seventh decile of the BHC, net, equivalised household income distribution and was £307 in 1996–97. This figure is equivalent to the "actual" income of a couple with no children. The corresponding "actual" values for a single person and a couple with three children aged 3, 8, and 11 are £187 and £509 respectively.

The mean value of equivalised income After Housing Costs (AHC), including the self-employed, lies in the seventh decile of the AHC, net, equivalised household income distribution and was £264 in 1996–97. Again, this figure is equivalent to the "actual" income of a couple with no children. The corresponding "actual" values for a single person and a couple with three children aged 3, 8, and 11 are £145 and £440 respectively.

Notes:

  1. 1. All figures are estimates and are taken from the Households Below Average Income (HBAI) data set which is based on the Family Resources Survey (FRS). The FRS does not include Northern Ireland.
  2. 2. 1996–97 is the latest year for which the above information is available.
  3. 3. The income measure used is weekly net (disposable) equivalised household income (that is to say "actual" income that is adjusted to reflect the composition of the household).
  4. 4. It is standard HBAI practice to give results for income both before and after housing costs, in order to allow for the effect of variations in housing costs between households.
  5. 5. It should be noted that deciles are numbered in ascending order relative to their position from the bottom of the income distribution. For example, the 7th decile would be the 7th decile from the bottom of the income distribution (and therefore the 3rd decile from the top of the distribution).

Lord Ashley of Stoke

asked Her Majesty's Government:

What percentage of all current incapacity benefit claimants have incomes (a) below the average income; (b) above twice the average income; and (c) lying between the average income and half of it. [HL2551]

Baroness Hollis of Heigham

The information is in the table.

Percentage of incapacity benefit claimants within selected income ranges
Income range Percentage (BHC) Percentage (AHC)
Below the average income 78 76

Percentage of incapacity benefit claimants within selected income ranges
Income range Percentage (BHC) Percentage (AHC)
Above twice the average income (1) (2)
Lying between the average and half of it 61 46

Source:

Households Below Average Income 1996–97.

Notes:

  1. 1. Figures in parenthesis denote low sample sizes, which means that the figures are unreliable as estimates for the population.
  2. 2. BHC = Income bands are calculated before adjusting for housing costs; AHC = Income bands are calculated after adjusting for housing costs.
  3. 3. These figures are estimates for the latest year available, which was the financial year 1996–97. The data have been derived from the Department of Social Security's Households Below Average Income dataset, which in turn is based upon the Family Resources Survey for the same period.
  4. 4. The income figures are based on household income, adjusted for household size and composition. This reflects the commonsense notion that a household of five adults will need a higher income than a person living alone in order to enjoy the same standard of living. The process of adjusting income in this way is known as equivalisation and is needed in order to make sensible income comparisons between households. Each income decile contains 10 per cent. of the population of Great Britain.
  5. 5. The equivalence scales make allowance for factors such as household size and the age of any children but not for any extra costs that people with disabilities may have. Attendance Allowance and Disability Living Allowance, which are paid to help with the extra costs of disability, are included as income in these estimates. However, removing Attendance Allowance and Disability Living Allowance from indvidivals' income makes little difference to the figures reported here.

Lord Ashley of Stoke

asked Her Majesty's Government:

What percentage of all current incapacity benefit claimants who also receive an occupational pension have incomes (a) below the average income; (b) above twice the average income; and (c) lying between the average income and half of it. [HL2552]

Baroness Hollis of Heigham

The information is in the table.

Percentage of incapacity benefit claimants who are also receiving an occupational pension within selected income ranges
Income range Percentage (BHC) Percentage (AHC)
Below the average income 61 55
Above twice the average income (3) (5)
Lying between the average income and half of it 55 46

Source:

Households Below Average Income 1996–97.

Notes:

  1. 1. Figures in parenthesis denote low sample sizes, which means that the figures are unreliable as estimates for the population.
  2. 2. BHC= Income bands are calculated before adjusting for housing costs; AHC = Income bands are calculated after adjusting for housing costs.
  3. 3. These figures are estimates for the latest year available, which was the financial year 1996–97. The data have been derived from the WA 137 Department of Social Security's Households Below Average Income dataset, which in turn is based upon the Family Resources Survey for the same period.
  4. 4. The income figures are based on household income, adjusted for household size and composition. This reflects the commonsense notion that a household of five adults will need a higher income than a person living alone in order to enjoy the same standard of living. The process of adjusting income in this way is known as equivalisation and is needed in order to make sensible income comparisons between households. Each income decile contains 10 per cent. of the population of Great Britain.
  5. 5. The equivalence scales make allowance for factors such as household size and the age of any children but not for any extra costs that people with disabilities may have. Attendance Allowance and Disability Living Allowance, which are paid to help with the extra costs of disability, are included as income in these estimates. However, removing Attendance Allowance and Disability Living Allowance from individuals' income makes little difference to the figures reported here.