The combination of the national minimum wage, tax credits, and the other forms of in-work support we have introduced ensures that work pays for the vast majority of people under the current tax and benefit systems. In particular, lone parents and disabled people have an income that is significantly higher in work than on the out-of-work benefits.
Parents living in rented accommodation who are moving into work are seeing a significantly increased gain to work as a result of changes introduced on 2 November 2009. From this date, child benefit, which had been treated as income in working out entitlement to housing benefit and council tax benefit has been fully disregarded. The effect has been to increase the gain to work for a family with one child by up to £17 per week.
In addition, for the last year, we have been piloting a Better Off in Work Credit. The aim of this credit was to reassure our customers that moving into work would be financially beneficial and to encourage them to look for and start work. The pilot ended on 30 October 2009. We are now evaluating the impact of this credit.