Hansard

Earnings-Related Supplement

Volume 205: debated on Monday 2 March 1992

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Mr. Meacher

To ask the Secretary of State for Social Security what would be the cash value of earnings-related supplement to unemployment benefit in 1992 for (a) a person on half average male earnings, (b) a person on average male earnings and (c) a person on one-and-a-half average male earnings if the supplement had not been abolished in 1991 and assuming it had been uprated by the pre-1981 formula.

Mr. Jack

[holding answer 27 February 1992]: In 1980 the formula for calculating ERS was 33 per cent. of reckonable weekly earnings in the last complete tax year between £17–50 (the then lower earnings limit for payment of national insurance contributions) and £30, plus 15 per cent. of earnings between £30 and £120 (the then upper earnings limit for payment of national insurance contributions). Because ERS was found not to meet the needs of the most vulnerable in the employment field it was abolished in January 1982 and the resulting savings targeted elsewhere within the social security system.Values in 1992 would be:

Earnings base for calculating ERSCash value of supplement to UB £
Half average male earnings18·10
Average male earnings38·90
One-and-a-half average male earnings55·85

Notes:

  • 1. Earnings related supplement has been uprated from its 1980 level.
  • 2. Average male earnings are taken from the April 1991 new earnings survey.

    • Using a 1980 base the net cost of re-introducing ERS is estimated at about £530 million which takes account of a £120 million reduction in payments of income support, housing benefit and community charge benefit.