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Housing Benefit

Volume 229: debated on Thursday 22 July 1993

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To ask the Secretary of State for Social Security what effect steepening the housing benefit taper from 65 per cent. to 80 per cent. would have on the proportion of income retained per £1 a week increase in gross earnings for (a) a lone parent earning £136 per week, (b) a single adult earning £132 per week and (c) a two adult family earning £196 per week, paying an average weekly rent of £48 per week.

Such an increase would have the effect of increasing the proportion of each £1 a week increase in gross earnings retained from 23p to 66p—that is, £1 less tax and national insurance contributions—in cases (b) and (c) but would take people in these circumstances out of housing benefit entitlement. For case (a) housing benefit entitlement would be retained and the proportion of income retained per £1 a week increase in gross earnings would reduce from 7p to 4p.

Note: Figures provided from tax benefit model 1993. The benefit rates are as at April 1993. Assumptions are for (a) lone parent with one child; (b) single adult over age 25; (c) two adult family with two children aged 4 and 6.