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Investment Allowances

Volume 451: debated on Monday 30 October 2006

To ask the Secretary of State for Work and Pensions what the capital limits are for those benefits for which he is responsible in (a) cash terms, (b) real terms with 1997 as the base and (c) terms of years of present maximum annual investment savings account allowances. (92783)

Capital limits apply to all income related benefits: income support; jobseeker's allowance; pension credit; housing benefit and council tax benefit.

Capital at or below the lower limit does not affect benefit. For capital between the lower and the upper limit, an amount of ‘tariff income’ is assumed. Claimants with capital above the upper limit are excluded from benefit. Pension credit has no upper limit, nor do housing benefit and council tax benefit when paid with pension credit.

Benefit rates are set for the financial year, not the calendar year, and with 1997-98 as the base year, the real terms capital limit amounts are set out together with the present upper and lower capital limits, which were increased for working age claimants in April 2006, in the table.

Capital limits in income related benefits in cash and real terms.

£

Cash terms

Real terms1

Council tax benefit, housing benefit, income support and jobseeker's allowance

Lower limit

6,000

4,750

Upper limit

16,000

12,750

Child's limit

3,000

2,500

Lower limit (RC/NH)2

10,000

8,000

Pension credit

Lower limit

6,000

4,750

Upper limit

3

3

Lower limit (RC/NH)W

10,000

8,000

1 Deflated by RPI base year 1997-98

2 RC = residential care home; NH = nursing home

3 No limit

Note:

Forecast RPI for 2006-07, from Budget 2006

The maximum allowance for Individual Savings Accounts (ISAs) is £7,000 in each tax year (stocks and shares only). The lower capital limit (working age adults and pensioners) capital is broadly equivalent to the ISA allowance. The upper capital limit (working age adults only) is broadly equivalent to twice the annual ISA allowance.