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Unemployed Persons (Benefit)

Volume 15: debated on Wednesday 16 December 1981

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asked the Chancellor of the Exchequer what is the latest total average public expenditure cost of maintaining an unemployed man with a wife and two children for a year; and if he will give a breakdown of the total to show the items which are included.

It is not possible to give a total average cost. The public expenditure cost depends upon the assumption made about the individual circumstances of the person. For a married man with two children, a household type which is far from representative of the unemployed as a whole, who became unemployed on 1 April 1981 the costs are given in the following table. The man may also be entitled to earnings-related supplement for the first six months of unemployment, in which case supplementary benefit would not be payable and there would be no entitlement to free welfare milk. Rent and rate rebates could however be claimed.

£
Unemployment Benefit1,892·63
Supplementary Benefit1,142·63
Free School Meals87·75
Free Welfare Milk67·56
Total Public Expenditure cost3,190·57

Notes:

(1) The man is assumed to be married with two children, one aged under 5, one aged between 5 and 10, and his wife is assumed not to be working.

(2) It is assumed that the man became unemployed on 1 April 1981.

(3) Flat rate unemployment benefit is not paid for the first three days of unemployment. It is then payable for 312 days based on a six-day week basis. The table covers only the financial year 1 April 1981 to 31 March 1982 and during this period only 310 days benefit would be paid.

(4) It is unlikely that supplementary benefit would be paid for the first few days of unemployment, pending receipt of unemployment benefits. The final wages received would be taken into consideration and in most cases would cover requirements for this period.

(5) Free school meals are payable only during term time. It has been assumed that throughout the year they would be paid for 39 weeks. The average cost has been assumed as 45 pence per day—£2·25 per week.

(6) As the man became unemployed at the beginning of the tax year it is unlikely that he would be entitled to any tax refunds. Income tax refunds have not therefore been included or taken into account when calculating entitlement to benefits.

(7) Child benefit has not been included as it would be payable whether or not the man was unemployed.