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Benefit Uprating

Volume 402: debated on Thursday 3 April 2003

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To ask the Secretary of State for Work and Pensions what estimate he has made of the effect upon claimants' (a) income and (b) entitlement to income related benefits arising From the uprating of benefits by RPI. [100736]

(a) Uprating of benefits by RPI ensures that claimants' benefit incomes rise at least in line with the rise in cost of living. Some benefits will be uprated by more than prices from April. For example, retirement pension will be uprated by 2.6 per cent., giving a pensioner on full state pension an extra £100 a year, and the minimum income guarantee by earnings (4 per cent.).

(b) Income-related benefits, excluding the minimum income guarantee, are uprated by the Rossi index, which is the RPI excluding housing costs and local taxes. This is because housing costs and local taxes are met through separate hypothecated benefits, for example housing benefit for rent. The impact of RPI itself on income-related benefits depends on the relative values of the two indices, but since any marginal increases in eligible rents and council taxes are almost always met in full by increased benefits, most claimants will see their benefits rise at least in line with the cost of living.