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SOCIAL SECURITY

Pensions

Mr. Field: To ask the Secretary of State for Social Security what estimates he has made, for each of the next five decades, of the increased cost to the National Insurance Fund of the increased rebates advocated in A New Contract for Welfare: Partnership in Pensions. [64949]

Mr. Timms: The estimated additional cost of the extra rebates because of State Second Pension is as follows:

£ billion (1998-99 prices)

20102020203020402050
Cost0.91.42.12.94.1

The introduction of Stakeholder Pension schemes is expected to lead to higher levels of contracting out. It is estimated that for every million people who contract out, £0.7 billion would be lost in National Insurance contributions.

Mr. Austin: To ask the Secretary of State for Social Security if he will estimate the real cost to an employee on average earnings of the restoration of the earnings link to the basic state pension for (a) 2000, (b) 2010, (c) 2020, (d) 2030, (e) 2040 and (f) 2050, based on a growth in national income and average earnings of 1.5 per cent. per annum; and if he will estimate for the same years the real costs as they would be if the basic state pension was linked to prices and in the absence of the minimum income guarantee. [69193]

Mr. Timms [holding answer 4 February 1999]: The information is in the table.

Weekly contributions required by employees on average earnings to meet the cost of price and earnings upratings of national insurance fund benefits

Price uprating of benefits and earnings limits Earnings uprating of benefits and earnings limits
Year£ per weekPercentage of all earnings£ per weekPercentage of all earnings
2000297.5307.6
2010337.3378.1
2020346.4468.7
2030355.7619.9
2040324.57310.2
2050293.58410.1

Notes:

1. The information is in constant 1998-99 price terms. However, costs can be met in a number of ways and the liability would not necessarily fall on employees.

2. Estimates assume 1.5 per cent. real earnings growth.

3. Means-tested benefit offsets have not been taken into account as they do not constitute part of the National Insurance Fund.

Source:

Estimates have been provided by the Government Actuary's Department


Mr. Field: To ask the Secretary of State for Social Security what will be, in each of the next five decades,

15 Feb 1999 : Column: 534

the gross and net public expenditure costs of the proposals outlined in A New Contract for Welfare: Partnership in Pensions. [64948]

Mr. Timms: I refer my hon. Friend to the reply I gave him on 11 February 1999, Official Report, column 376, which gives the gross and net public expenditure costs for State Second pension compared to SERPS. The public expenditure costs arising from the introduction of Stakeholder Pension schemes would be dependent on the level of take-up. The estimated cost of guaranteeing eligible pensioners an income of at least £75 a week is £265 million in 1999-2000.

Child Support Agency

Ms Rosie Winterton: To ask the Secretary of State for Social Security how many absent parents in each of the last three years filed returns with the Child Support Agency stating that they were self-employed. [70430]

Angela Eagle: The administration of the Child Support Agency is a matter for the Chief Executive, Mrs. Faith Boardman. She will write to my hon. Friend.

Letter from Faith Boardman to Ms Rosie Winterton, dated 11 February 1999:



    I am not able to provide all of the information in the precise format that you have requested, but have provided as much as is available.


    Information relating to the number of self employed non-resident parents who have had a maintenance assessment is produced by the Analytical Services Division of the Department of Social Security.


    The Department of Social Security Analytical Services Division publish quarterly a summary of statistics relating to child support; the latest report was published today and shows that at November 1998 36,500 maintenance assessment cases referred to self employed non-resident parents. The full report is available in the House of Commons library. Information for previous years and comparisons with the total live and assessed caseload are shown in the table attached.


    We acknowledge that cases where the non-resident parent is self employed can be more difficult to progress, especially where the non-resident parent does not wish to co-operate. The key to assure early co-operation is by personal contact with our clients. By approaching clients at the initial stages of their assessment we aim to build a better relationship with them, address their concerns promptly and provide an improved level of service.


    We have recently completed a pilot study in the South Western Business Unit, looking at how best to process self employed cases. Trials using dedicated staff dealing exclusively with the self employed have shown a marked reduction in processing time and an increase in the collection of maintenance. We intend to have specific sections, supported by accountants where necessary, in each of the other 5 front line Business Unit by March 1999 to deal exclusively with self employed customers.

15 Feb 1999 : Column: 535


    The Welfare Reform and Pensions Bill published on 10 February 1999 contains a provision which allows the Inland Revenue to pass information about the earnings of a self employed non-resident parent where the Agency enquiries have failed to establish the facts. This will allow assessments to be made in a number of the most difficult cases.


    Additionally, we have increased resources for our Client Helplines and the National Enquiry Line, extended our hours of opening to cover 8.00am to 8.00pm Monday to Friday and 9.00am to 5.00pm on Saturdays and carried out trials to greatly improve and increase clients' opportunities to secure a face to face service.


    I hope this is helpful.

Maintenance assessments for self employed non-resident parents

November 1996November 1997November 1998
Live and assessed caseload545,900694,500864,400
Self Employed cases21,10028,90036,500
Self Employed cases as % of live and assessed caseload4%4%4%

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Minimum Wage

Ms Buck: To ask the Secretary of State for Social Security what estimate he has made of the effect of the introduction of the minimum wage on the number of family credit claimants where the main earner has gross weekly earnings of (a) under £40, (b) £40 to £79.99, (c) £80 to £119.99, (d) £120 to £159.99, (e) £160 to £199.99, (f) £200 to £249.99, (g) £250 to £300 and (h) £300 and over. [69750]

Angela Eagle: The information is in the table.

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The impact of the introduction of the national minimum wage (nmw) on the distribution of gross weekly earnings of the main earner

Gross Earnings £ per weekAbove NMW level--no change in Family Credit (FC)Below NMW level but on maximum FC. Earnings rise--no change in FCBelow NMW level. Earnings rise. FC falls (but by less than the increase in earnings)Below NMW. Earnings rise--float families above the levels at which FC is payableTotal
Under £4025,5003,5005,0001,50037,500
£40--£79.99118,00061,00070,5005,500256,000
£80--£119.99113,000--60,0008,500182,000
£120--£159.9994,000--35,0005,000134,000
£160--£199.9993,500--12,0002,500108,000
£200--£249.0070,000--2,5002,50075,000
£250--£299.9916,500----50016,500
£300+2,000------2,000
Total532,50065,000185,00026,000811,000

Notes:

1. Estimates based on a 5 per cent. sample of FC recipients and the 1995-6 Family Resources Survey uprated to 1999-2000 prices. Estimates calibrated to 1999-2000 FC forecast assuming FC continues throughout the year.

2. Estimates assume no restoration of earnings differentials above the minimum wage and no employment effects.

3. Analysis shows that partners earnings may also increase on introduction of the minimum wage.

4. Estimates rounded to nearest 500. Totals may not sum owing to rounding. (--) indicated a figure of less than 250.


15 Feb 1999 : Column: 535


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