§ Mr. FieldTo ask the Secretary of State for Social Security if he will set out the basis of his calculation of the number of people who will be taken off Housing Benefit as a result of the Working Families Tax Credit. [135262]
§ Angela EagleEstimates of the numbers of households taken off Housing Benefit as a result of the Working Families Tax Credit were produced using the Department of Social Security's Policy Simulation Model (PSM). The PSM is based on the Department's annual Family Resources Survey, which is a sample of around 23,000 households in Great Britain. Individuals' and households' income tax and national insurance liabilities, and entitlements to tax credits and social security income-related benefits, are modelled according to the prevailing tax and benefit rules and rates. The numbers in receipt of particular benefits are then calibrated to the forecasts for those benefits, published in the departmental report, or underlying the Pre-Budget Report.
The effects of Working Families Tax Credit on the number of Housing Benefit recipients was determined by modelling two different benefit systems—one with Working Families Tax Credit, and one as if Family Credit had continued in existence, with appropriate uprating of benefit rates. All other tax and benefit rules were kept the same in the two systems. Adjustments were then made to ensure coherence with other forecasts. Comparison of the two modelled systems then gives the effect on the number of Housing Benefit recipients.