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Volume 172: debated on Thursday 17 May 1990

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To ask the Secretary of State for Social Security if he will make a statement on the basis on which income from savings is calculated for the purpose of benefit withdrawal.

No income is calculated from the first £3,000 of any savings in the income-related benefits. An assumed (tariff) income of £1 a week for every £250, or part of £250, is calculated for savings above £3,000, up to £8,000 in income support and family credit and up to £16,000 in housing benefit and community charge benefit. The actual income generated from savings is ignored.In income support, tariff income is taken into account in full against entitlement. However, the effect of tariff income on family credit, housing benefit or community charge benefit depends on the amount of other income available and the circumstances of the individual case, including the amount of eligible rent or community charge and the effect of the tapers. The tapers are applied to any income above the appropriate applicable amount and the resulting figure is offset against the maximum benefit payable. In family credit the taper is 70 per cent., in housing benefit it is 65 per cent. and in community charge benefit it is 15 per cent.