§ Mr. CousinsTo ask the Secretary of State for Social Security when the tariff incomes schedule of attributed income from savings was last revised; what rate of return is assumed by the schedule; and what changes in the schedule would result if current bank rate plus 1 per cent. was used to determine the base for the Schedule. [111361]
§ Mr. BayleyThe tariff income rule has remained unchanged since its introduction in 1988. However, in 1990 the upper capital limit for Income Support was increased from £6,000 to £8,000. In 1996 higher capital limits for people living permanently in a residential care or a nursing home were introduced. The capital limits are kept under regular review but are not increased annually.
The basis for the Department's calculation of tariff income in the income-related benefits, with a system of graduated deductions between lower and higher limits, is not intended to represent any return that could be obtained from investing capital and hence is not based on the current bank rate or any other rate of return. A tariff income of £1 per week is assumed for each £250, or part thereof, held between the appropriate lower and upper limits1. This system provides a straightforward method of 896W calculating the weekly contribution which people with capital in excess of the lower limit are expected to make from those resources to help meet their normal living expenses.
Notes:
1. £3,000 and £8,000 in Income Support and income-based Jobseeker's Allowance; except in residential care home and nursing home cases where the limits are £10,000 and £16,000; and Housing Benefit and Council Tax Benefit where the limits are £3,000 and 16,000.
2. Based on Quoted (nominal) sterling interest rates—households sectors—Bank Timed Deposits—December 1999.
3. Applying the notional interest rate to the band midpoint.