Income Thresholds (Hansard, 20 July 2004)

§ Andy King
To ask the Secretary of State for Work and Pensions what the income thresholds used in paragraph 7 of the reply by the Government to the Second Report of the Work and Pensions Committee of Session 2003–04, Cm 6200 are in weekly cash amounts of income(a) before housing cost s, (i) for the relative low income and (ii) for the absolute low income and (b) after housing costs (A) for the relative low income and (B) for the absolute low income. [183821]

§ Mr. Pond
The information is in the tables.

Weekly cash values for the relative low income threshold by illustrative household type at 2002–03 prices

Household type Before housing costs After housing costs

Couple with no children (equivalised income benchmark) 194 172

Couple with two children aged 5 and 11 283 253

Single with two children aged 5 and 11 207 175

Couple with one child aged 5 235 208

Single with one child aged 5 159 131

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how many of these rely on benefits to make up more than half of their income, broken down by gender; how much is being spent on benefits for this group; and if he will make a statement. [172532]

§ Mr. Pond
The estimated expenditure on incapacity related benefits, Jobseekers Allowance, other income-related benefits and disability or carer benefits for claimants aged 50 to state pension age is estimated to be £11.6 billion in 2003–04. Total expenditure on all claimants aged 50 to state pension age in 2003–04 is estimated to be £12.5 billion.
In 2001–02, the latest year for which information is available, benefits made up over half of individual income for 82 per cent. of men and 89 per cent. of women, overall 84 per cent. of people, aged 50 to state pension age receiving any benefit other than those with just Child Benefit or Winter Fuel Payment' and not working.
The available information on the number of people aged 50 to state pension age claiming benefits, and the number in this age group who are not in work is in the table. ¹ Individual incomes data 2001–02. Housing Benefit and Council Tax Benefit are not considered as benefit income or part of total income.

Weekly cash values for the absolute low income threshold by illustrative household type at 2002–03 prices

Household type Before housing costs After housing costs

Couple with no children (equivalised income benchmark) 166 140

Couple with two children aged 5 and 11 242 206

Single with two children aged 5 and 11 178 143

Couple with one child aged 5 201 170

Single with one child aged 5 136 107

Notes:

1. Estimates relate to the household's status at the time they were interviewed for the FRS.

2. The threshold '60 per cent. of median' (equivalised weekly household income) is the most commonly used in reporting absolute and relative trends in low income.

3. The estimates are based on sample counts, which have been adjusted for non-response using multipurpose grossing factors that control for tenure, council tax band and a number of other variables. Estimates are subject to both sampling error, and to remaining variability in non-response which is not corrected by the grossing regime.

4. Equivalised incomes use the McClements equalisation scale.

5. When reporting numbers of individuals in 'relative low income', we apply 60 per cent. of the median income for the year in question; therefore, this threshold changes from one year to the next.

161W

6. When reporting numbers of individuals in 'absolute low income', we take a single level of real equivalised income, which is set at 60 per cent. of the 1996–97 median income, which is £166 before housing costs and £140 after housing costs, at 2002–03 prices. Equivalised income adjusts household income for household size and composition. The corresponding cash values for this absolute threshold, for different family types are shown in the table.

7. All figures are in pounds per week, in 2002–03 prices, rounded to the nearest pound, and are consistent with current National Statistics conventions.

8. The figures relating to absolute and relative low income were derived from "Households Below Average Income—An analysis of the income distribution for 1994–95—2002–03" (HBAI). Copies are available in the Library.

Source:

Family Resources Survey (FRS).

Weekly cash values for the relative low income threshold by illustrative household type at 2002–03 prices
Household type	Before housing costs	After housing costs
Couple with no children (equivalised income benchmark)	194	172
Couple with two children aged 5 and 11	283	253
Single with two children aged 5 and 11	207	175
Couple with one child aged 5	235	208
Single with one child aged 5	159	131

Weekly cash values for the absolute low income threshold by illustrative household type at 2002–03 prices
Household type	Before housing costs	After housing costs
Couple with no children (equivalised income benchmark)	166	140
Couple with two children aged 5 and 11	242	206
Single with two children aged 5 and 11	178	143
Couple with one child aged 5	201	170
Single with one child aged 5	136	107
Notes:
1. Estimates relate to the household's status at the time they were interviewed for the FRS.
2. The threshold '60 per cent. of median' (equivalised weekly household income) is the most commonly used in reporting absolute and relative trends in low income.
3. The estimates are based on sample counts, which have been adjusted for non-response using multipurpose grossing factors that control for tenure, council tax band and a number of other variables. Estimates are subject to both sampling error, and to remaining variability in non-response which is not corrected by the grossing regime.
4. Equivalised incomes use the McClements equalisation scale.
5. When reporting numbers of individuals in 'relative low income', we apply 60 per cent. of the median income for the year in question; therefore, this threshold changes from one year to the next.