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High Rent Area Authorisations

Volume 84: debated on Wednesday 30 October 1985

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asked the Secretary of State for Social Services what would be (a) the estimated cost and (b) the estimated gains and losses, by income band, of the introduction of a single taper scheme based on net income and with rent tapers of (i) 35p, (ii) 40p, (iii) 45p and (iv) 50p, and rate tapers of half the rent taper.

[pursuant to his reply, 5 March 1985, c. 515]: The estimated increase in expenditure of the net income housing benefit schemes, based on the assumptions given in the notes below, would be as follows:

Rent taperRates taperIncrease in expenditure
PercentagePercentage(£ million per annum)
(i)3517·5340
(ii)4020160
(iii)4522·510
(iv)5025-100
The estimated gains and losses by income bands in relation to the current needs allowances would be as follows:

Size of weekly gain/lossBelowAboveTotal
£More than £20·00£20·00 to £10·00£10·00 to £0·00£0 to £10·00£10·00 to £20·00£20·00 to £30·00£30·00 to £40·00£40·00+
4·01 to 5·00003020100060
5·01 +010202010060
Total50540450420280130801,940
(iii) Rent taper45 per cent., rates taper 22½per cent.
Gainers
0·01 to 1·00205023014050201010530
1·01 to 2·0010301507010101010310
2·01 to 3·002010040201010200
3·01 to 4·00102010020101010170
4·01 to 5·0040101010101080
5·01 +301004010202040240
Total401407203301107050801,550
Losers
0·01 to 1·0020280180120504030730
1·01 to 2·000101701602301308040830
2·01 to 3·0001030701001003020360
3·01 to 4·0002050602010170
4·01 to 5·00080201010120
5·01 +020303020090
Total506005205403201601002,300
(iv) Rent taper 50 per cent., rates taper 25 per cent.
Gainers
0·01 to 1·0020502001002010410
1·01 to 2·00103014060201010280
2·01 to 3·00201102010101010170
3·01 to 4·00101070101010120
4·01 to 5·0040101070
5·01 +20903010101020200
Total40140660230604030501,260
Losers
0·01 to 1·001029020080404030690
1·01 to 2·000301701701901207050800
2·01 to 3·0001070901201003020440
3·01 to 4·0003070100403010280
4·01 to·5 00030305025130
5·01 +07060403010220
Total506606205803501701102,550

Notes:

1. The estimates are derived from the DHSS housing benefits computer simulation model for standard housing benefit with the following adjustments to the standard parameters as at November 1984:

a. Needs allowances — set at the appropriate long-term supplementary benefit scale rate plus £2 eg single person £37·70, couple/lone parent £59·10. The pensioner addition is assumed to be nil, but the dependent child addition is unchanged.

b. 100 per cent. starting point—the starting point for the calculation of benefit, normally 60 per cent. of rent and of rates, is increased to 100 per cent.

c. Tapers—those below the needs allowance become nil whilst those above the needs allowance are set at the levels indicated in each table.

d. Net Income—the level of gross income taken into account is reduced where appropriate by the assumed amount of income tax and national insurance contributions, the latter at the not contracted out rate, on the basis that income remains constant throughout the tax year. Similarly only the single person's, married man's, wife's earned income, and additional personal tax allowances are assumed to be available.

e. Earnings disregards—both earnings disregards are assumed to be £4·35 the level of the current main earner's disregard once the tax and national insurance elements have been removed.

2. The computer simulation model is based on family expenditure survey data updated and adjusted to reflect actual housing benefit caseloads and expenditure. The estimates are therefore subject to statistical and modelling error. In particular figures of 50,000 or less will be subject to very considerable proportionate error, and individual breakdowns should accordingly be treated with caution.

3. Caseload estimates are rounded to the nearest 10,000. Figures of less than 5,000 are indicated by an asterisk. Some totals may, therefore not be equal to the sum of their component parts. Expenditure estimates are rounded to the nearest £10 million.

4. Certificated caseload and expenditure remain unchanged.

5. The model does not take account of the effects of the different schemes on housing benefit supplement. The expenditure estimates therefore do not take account of changes in HBS.