[holding answer 12 December 2006]: We have not made an estimate of the reduction in costs to public funds of taxing Financial Assistance Scheme payments and not having to pay means-tested benefits to some of the recipients. It is difficult to estimate what the cost of the proposals would be after taking into account tax and benefit offsets.
In order to consider what reduction there would be in the income-related benefits, we would need data on the income distribution of those benefiting from FAS, the tax brackets they are in and their benefit entitlements. We do not hold such data. We cannot use the data held on income distribution over the whole of the pensioner population, as we cannot know if this relatively small group of people are typical of the entire population. The same applies to estimating increases in tax revenue.