§ Mr. BoswellTo ask the Secretary of State for Education and Employment for what reason changes were made to the calculations for parental income in assessing liability for student support contributions whereby MIRAS relief was disapplied in 2000–01; and for what reason life assurance premiums were similarly disapplied. [121339]
§ Mr. Wicks[holding answer 11 May 2000]: The removal of the disregard of parental income in student support for mortgage interest that attracts tax relief follows the wider Government decision to abolish tax relief for mortgage payments from April 2000. The abolition of MIRAS has been public for some time and the families of students entering higher education this year will be well aware of it. We will ensure that the families of students already in higher education are not asked to pay any more as a result of the abolition of MIRAS in the 2000–01 academic year. From the 2001–02 academic year, we are raising the contribution threshold from £17,805 to £20,000, as announced by the Secretary of State on 25 January. This increase is well above the rate of inflation and will benefit both mortgage payers and those who do not have mortgages.
The Government keep the student support system under review to ensure that support is targeted at those students who need it most. The disregard for life assurance premiums which attract tax relief has been removed because it gave a limited group of parents with certain life assurance policies a double benefit of tax relief on payments and a disregard from their income in determining their contribution to their children's support.