Select Committee on Social Security First Report


ANNEX 1

Tax Credit: Net Incomes, Incomes over Income Support Levels, and implicit "Rent" covered at critical income thresholds
All earnings, tax and benefit rates are for 1998-99
1. Household type: Lone parent plus one child

ThresholdNet Income
(including TC)
Income Over IS
(£94.70)
"Implicit
Rent"
££ £

16 hours @ £3.60 = £57.60 (Minimum Wage) 135.2040.5010.07
16 hours @ £4.14 = £66.24 (Female entry wage) 143.6248.9215.55
16 hours @ £4.88 = £78.08 (Male entry wage) 154.2759.5722.47
30 hours @ £3.60 = £108.00 (Minimum Wage) 183.7089.0034.58
30 hours @ £4.14 = £124.20 (Female entry wage) 188.8194.1137.90
30 hours @ £4.88 = £146.40 (Male entry wage) 195.80101.1042.45
40 hours @ £3.60 = £144.00 (Minimium Wage) 195.04100.3441.95
40 hours @ £4.14 = £165.60 (Female entry wage) 201.82107.1246.36
40 hours @ £4.88 = £195.20 (Male entry wage) 210.74116.0452.16

Notes:
"Implicit Rent" is the maximum rent level where the household would not qualify for housing benefit entitlement at each level of earnings, given the proposed structure of the Tax Credit scheme. Minimum wage levels are those recommended by the Low Pay Commission; "Entry Level" wages are averages for previously non-employed people moving into jobs. Entry level wage rates for 1997 were kindly provided by Paul Gregg at the Centre for Economic Performance, LSE, and have been uprated to 1998-99 levels.



Tax Credit: Net Incomes, Incomes over Income Support Levels, and implicit "Rent" covered at critical income thresholds
All earnings, tax and benefit rates are for 1998-99
2. Household type: Lone parent plus two children

ThresholdNet Income
(including TC)
Income Over IS
(£114.50)
"Implicit
Rent"
££ £

16 hours @ £3.60 = £57.60 (Minimum Wage) 159.3543.8512.90
16 hours @ £4.14 = £66.24 (Female entry wage) 167.7753.2718.37
16 hours @£4.88 = £78.08 (Male entry wage) 178.4263.9225.30
30 hours @ £3.60 = £108.00 (Minimum Wage) 207.8593.3537.49
30 hours @ £4.14 = £124.20 (Female entry wage) 212.9698.4640.73
30 hours @ £4.88 = £146.40 (Male entry wage) 219.95105.4545.27
40 hours @ £3.60 = £144.00 (Minimum Wage) 219.19104.6944.78
40 hours @ £4.14 = £165.60 (Female entry wage) 225.97111.4749.18
40 hours @ £4.88 = £195.20 (Male entry wage) 234.89120.3954.99



Tax Credit: Net Incomes, Incomes over Income Support Levels, and implicit "Rent" covered at critical income thresholds
All earnings, tax and benefit rates are for 1998-99
3. Household type: Couple plus one child

ThresholdNet Income
(including TC)
Income Over IS
(£112.35)
"Implicit
Rent"
££ £

16 hours @ £3.60 = £57.60 (Minimum wage) 135.2022.858.35
16 hours @ £4.14 = £66.24 (Female entry wage) 143.6231.2713.82
16 hours @ £4.88 = £78.08 (Male entry wage) 154.2741.9220.75
30 hours @ £3.60 = £108.00 (Minimum wage) 183.7071.3532.86
30 hours @ £4.14 = £124.20 (Female entry wage) 188.8176.4636.18
30 hours @ £4.88 = £146.40 (Male entry wage) 195.8083.4540.72
40 hours @ £3.60 = £144.00 (Minimum wage) 195.0482.6940.23
40 hours @ £4.14 = £165.60 (Female entry wage) 201.8289.5744.63
40 hours @ £4.88 = £195.20 (Male entry wage) 210.7498.3950.44


Tax Credit: Net Incomes, Incomes over Income Support Levels, and implicit "Rent" covered at critical income thresholds
All earnings, tax and benefit rates are for 1998-99
4. Household type: Couple plus two children

ThresholdNet Income
(including TC)
Income Over IS
(£137.70)
"Implicit
Rent"
££ £

16 hour @ £3.60 = £57.60 (Minimum Wage) 164.9527.2511.21
16 hours @ £4.14 = £66.24 (Female entry wage) 173.3735.6716.68
16 hours @ £4.88 = £78.08 (Male entry wage) 184.0246.4223.61
30 hours @ £3.60 = £108.00 (Minimum Wage) 213.4575.7535.72
30 hours @ £4.14 = £124.20 (Female entry wage) 218.5680.8639.04
30 hours @ £4.88 = £146.40 (Male entry wage) 225.5587.8543.58
40 hours @ £3.60 = £144.00 (Minimum Wage) 224.7987.0943.09
40 hours @ £4.14 = £165.60 (Female entry wage) 231.5795.8747.49
40 hours @ £4.88 = £195.20 (Male entry wage) 240.49102.7953.30


Tax Credit: Net Incomes, Incomes over Income Support Levels, and implicit "Rent" covered at critical income thresholds
All earnings, tax and benefit rates are for 1998-99
5. Household type: Couple plus three children

ThresholdNet Income
(including TC)
Income Over IS
(£157.50)
"Implicit
Rent"
££ £

16 hours @ £3.60 = £57.60 (Minimum wage) 189.1031.6014.04
16 hours @ £4.14 = £66.24 (Female entry wage) 197.5242.0219.51
16 hours @ £4.88 = £78.08 (Male entry wage) 208.1750.6726.44
30 hours @ £3.60 = £108.00 (Minimum wage) 237.6080.1038.55
30 hours @ £4.14 = £124.20 (Female entry wage) 242.7185.2141.86
30 hours @ £4.88 = £146.40 (Male entry wage) 249.7092.2046.41
40 hours @ £3.60 = £144.00 (Minimum wage) 248.9491.4445.92
40 hours @ £4.14 = £165.60 (Female entry wage) 255.7298.2250.32
40 hours @ £4.88 = £195.20 (Male entry wage) 264.64107.1056.12




 
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Prepared 2 December 1998