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Pensioners (Spending Power)

Volume 124: debated on Friday 11 December 1987

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To ask the Secretary of State for Social Services, if he will publish in the Official Report the information relating to net weekly spending power of pensioners at a range of levels of gross income provided to the hon. Member for Kensington by the Parliamentary Under-Secretary of State on 20 November.

The information requested is shown in the tables. These show the net weekly spending power of a single pensioner and a pensioner couple paying (a) rent of £15 and rates of £7 per week and (b) rent of £30 and rates of £10 per week, under the current scheme at November 1985 benefit levels and November 1986 benefit levels, and under the reformed scheme to be implemented in April 1988 at the 1985 illustrative rates of benefit.

Gross income

Tax

Rent

Rent rebate

Rates

Rate rebates

Net income after housing costs

Supplementary pension (SP)

Housing benefit supplement (HBS)

Disposable income with SP or HBS

88·3010·9730·006·4710·000·8344·630·000·0044·63
138·3025·9730·00nil10·00nil72·330·000·0072·33

Pensioner Couple

61·300·0030·0030·0010·0010·0061·302·520·0063·82
66·300·0030·0020·3810·006·9553·630·0010·1963·82
71·300·0030·0017·9310·005·9755·200·008·6263·82
76·300·0030·0016·4810·005·3258·100·005·7263·82
81·300·0030·0015·0310·004·6761·000·002·8263·82
91·302·8430·0012·1310·003·3763·960·000·0063·96
101·305·8430·009·2310·002·0766·760·000·0066·76
111·308·8430·006·3310·000·7769·560·000·0069·56
161·3023·8430·00nil10·00nil97·460·000·0097·46

Table 3: November 1986, Rent £15·00, Rates £7·00

Gross income

Tax

Rent

Rent rebate

Rates

Rate rebates

Net income after housing costs

Supplementary pension (SP)

Housing benefit supplement (HBS)

Disposable income with SP or HBS

Single pensioner

38·700·0015·0015·007·007·0038·703·410·0042·11
43·700·0015·0011·637·005·2538·580·003·5342·11
48·700·0015·009·137·004·2540·080·002·0342·11
53·700·0015·007·627·003·5842·900·000·0042·90
58·701·1315·006·177·002·9344·670·000·0044·67
68·704·0315·003·277·001·6347·570·000·0047·57
78·706·9315·00

1

7·00

1nil

49·770·000·0049·77
88·709·8315·00nil7·00nil56·870·000·0056·87
138·7024·3315·00nil7·00nil92·370·000·0092 37

Pensioner couple

61·950·0015·0015·007·007·0061·953·010·0064·96
66·950·0015·0011·387·005·1561·480·003·4864·96
71·950·0015·008·937·004·1763·050·001·9164·96
76·950·0015·007·487·003·5265·950·000·0065·95
81·950·0015·006·037·002·8768·850·000·0068·85
91·951·5415·003·137·001 5773·110·000·0073·11
101·954·4415·00nil7·00nil75·510·000·0075·51
111·957·3415·00nil7·00nil82·610·000·0082·61
161·9521·8415·00nil7·00nil118·110·000·00118·11

Table 4: November 1986, Rent £30·00, Rates £10·00

Gross income

Tax

Rent

Rent rebate

Rates

Rate rebates

Net income after housing costs

Supplementary pension (SP)

Housing benefit supplement (HBS)

Disposable income with SP or HBS

Single pensioner

38·700·0030·0030·0010·0010·0038·703·410·0042·11
43·700·0030·0020·6310·007·0531·380·0010·7342·11
48·700·0030·0018·1310·006·0532·880·009·2342·11
53·700·0030·0016·6210·005·3835·700·006·4142·11
58·701·1330·0015·1710·004·7337·470·004·6442·11
68·704·0330·0012·2710·003·4340·370·001·7442 11
78·706·9330·009·3710·002·1343·270·000·0043·27
88·709·8330·006·4710·000·8346·170·000·0046·17
138·7024·3330·00nil10·00nil74·370·000·0074·37

Pensioner couple

61·950·0030·0030·0010·0010·0061·953·010·0064·96
66·950·0030·0020·3810·006·9554·280·0010·6864·96
71·950·0030·0017·9310·005·9755·850·009·1164·96
76·950·0030·0016·4810·005·3258·750·006·2164·96
81·950·0030·0015·0310·004·6761·650·003·3164·96
91·951·5430·0012·1310·003·3765·910·000·0065·91
101·954·4430·009·2310·002·0768·810·000·0068·81
111·957·3430·006·3310·000·7771·710·000·0071·71
161·9521·8430·00nil10·00nil10·0110·000·00100·11

Notes for tables 1 to 4:

1. The November 1985 retirement pensions, housing benefit needs allowances and supplementary pension scale rates have been used for tables 1 and 2, and the July 1986 levels for tables 3 and 4.

2. The 1985–86 age allowances and tax rates have been used for tables 1 and 2, and the 1986–87 allowances and rates for tables 3 and 4.

3. Supplementary pension and housing benefit supplement have been calculated on the basis that the single pensioner is aged at least 65 but under 80, and in the case of the pensioner couple, at least one is aged 65 and both are under 80. The long-term supplementary benefit scale rates for November 1985 are £37·50 for a single pensioner, and £60·00 for a pensioner couple: the July 1986 rates are £37·90 and £60·75 respectively. For the purposes of calculating to total supplementary pension entitlement in these tables it is assumed that the assessment includes £1·40 for water rates (the figure used in the technical annex to the White Paper ("Reform of Social Security") and also in all cases the average additional requirement for pensioners: this, net of the available scale margin, is £2·42 for November 1985 and £2·81 for July 1986.

4. Income is assumed to unearned and without disregard throughout and capital is assumed to be below £3,000.

5. The minimum rent or rate rebate is 50p per week (noted as "nil'" in the tables where this rule has been applied).

Illustrate figures showing components of net spending power for pensioners receiving housing under the revised scheme to be implemented in 1988, at November 1985 benefit levels (Rent taper 60 per cent., rates taper 20 per cent.)

Table 5: November 1985, Rent £15·00, Rates £7·00

Gross Income

Tax

Rent

Rent Rebate

Rates

Rate Rebate

Disposal Income

Single Pensioner

40·600·0015·0015·007·005·6039·20
43·300·0015·0013·387·005·0639·74
48·300·0015·0010·387·004·0640·74
53·300·4715·007·667·003·1541·65
58·301·9715·005·567·002·4542·35
68·304·9715·001·367·001·0543·75
78·307·9715·000·007·0000048·33
88·3010·9715·000·007·000·0055·33
138·3025·9715·000·007·000·0090·33

Pensioner Couple

63·250·0015·0015·007·005·6061·85
66·300·0015·0013·177·004·9962·46
71·300·0015·0010·177·003·9963·46
76·300·0015·007·177·002·9964·46
81·300·0015·004·170·001·9965·46
91·302·8415·000·007·000·5667·02
101·305·8415·000·007·000·0073·46
111·308·8415·000·007·000·0080·46
161·3023·8415·000·007·000·00115·46

Table 6: November 1985, Rent £30·00, Rates £10·00

Gross Income

Tax

Rent

Rent Rebate

Rates

Rate Rebate

Disposable Income

Single Pensioner

40·600·0030·0030·0010·008·0038·60
43·300·0030·0028·3810·007·4639·14
48·300·0030·0025·3810·006·4640·14
53·300·4730·0022·6610·005·5541·05
58·301·9730·0020·5610·004·8541·75
68·304·9730·0016·3610·003·4543·15
78·307·9730·0012·1610·002·0544·55
88·3010·9730·007·9610·000·6545·95
138·3025·9730·000·0010·000·0072·33

Pensioner Couple

63·250·0030·0030·0010·008·0061·25
66·300·0030·0028·1710·007·3961·86
71·300·0030·0025·1710·006·3962·86
76·300·0030·0022·1710·005·3963·86
81·300·0030·0019·1710·004·3964·86
91·302·8430·0014·8710·002·9666·29
101·305·8430·0010·6710·001·5667·69
111·308·8430·006·4710·00nil*68·93
161·3023·8430·000·0010000·0097·46

Notes to Tables 5 and 6:

1. Retirement pensions are at November 1985 basic rates. However, the first line in each part of the tables shows the gross income of a pensioner whose retirement pension has been topped up to the income support level.

2. Housing benefit levels and tapers and income support rates are at November 1985 levels as set out in the technical annex to the White Paper "Reform of Social Security" (Cmnd. 9691). The pensioners are assumed in all cases to be aged under 80: under the reformed schemes, pensioners over 80 would have a higher disposable income (in most of the shown cases, £1·80 higher for a single person and £1·76 for a couple on the basis of the illustrative assumptions).

3. Tax allowances and rates are those in force for 1985–86.

4. Income is assumed to be unearned and without disregard throughout and capital is assumed to be below £3,000.

5. The 20 per cent. minimum contribution to domestic rates has been applied, but the effect of compensation for this element is not shown.

6. The minimum rent rebate or rate rebate payable is 50p per week (noted as "nil*" in the tables where this rule has been applied).

7. Under income support, unlike supplementary benefit, separate help with water rates will not be available; this should be borne in mind when comparing the disposable incomes under the old and the new schemes. The tables also take no account of transitional protection for those receiving supplementary benefit at the changeover.