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Earnings Disregard

Volume 281: debated on Tuesday 16 July 1996

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To ask the Secretary of State for Social Security (1) what is his estimate of the costs of extending the child care disregard to claimants of income support in each of the cases where (a) one child in the family is aged under 11 years and (b) the disregard is applicable to (i) each child aged under 11 years, (ii) one child in the family under five years, (iii) each child aged under five years, (iv) one child in respect of whom a disabled child's premium is payable, (v) each child in respect of whom a disabled child's premium is payable and (vi) each child in a family irrespective of age; [34237](2) what is his estimate of the cost to public funds of ignoring

(a) travel-to-work expenses and (b) reasonable child care expenses from earnings before the earnings disregard is applied to (i) income support, (ii) housing benefit and (iii) council tax benefit; and how many people would gain from these changes. [34230]

The estimated cost of ignoring travel to work costs before the earnings disregard is applied in income support, housing benefit and council tax benefit, and the numbers who would gain from this is set out in the table.Costs are estimated using the 1994 quarterly statistical enquiry and the 1991, 1992, 1993 family expenditure surveys, uprated to 1996–97 levels. Information on travel-to-work costs is taken from the 1994–95 family resources survey. This data should be interpreted with caution, as no figures are collected directly on costs of running cars or motorcycles. Instead, costs are estimated using mileage rates—42p per mile for cars and 9p per mile for motorcycles. Outlying cases have been ignored.

Cost of disregarding travel to work costsCosts £ millionGainers
Income Support1540,000
Housing Benefit75170,000
Council Tax Benefit25180,000
1. Costs are rounded to the nearest £5 million, gainers to the nearest 10,000. Estimates are very general as they are based on information on average travel-to-work expenses for benefit recipients.2. Figures for income support include the cost of jobseeker's allowance from October 1996.3. Behavioural effects have not been measured.The costs of registered child care of up to £60 a week for families with at least one child aged under 11 are already disregarded in housing benefit and council tax benefit as well as in family credit and disability working allowance. Income support is not an in-work benefit. The number of income support recipients who pay for registered child care is extremely small and the cost, subject to any behavioural effects, of disregarding such expenses is negligible.