ANNEX 2
A working lone parent after the budget (All examples
use 1998-99 benefit rates)
EXAMPLE:
Lone parent with two children, one aged nine
and one aged 12, working 24 hours for net weekly earning of £85,
paying the average council rent of £43.89, Council Tax £8.80,
childcare costs of £60:
| Income in paid ork—comparison with existing claimant
|
|
| Date | FC/WFTC | HB
| CTB | Total income | After childcare
and housing costs
| Net
gain/loss | Position relative to existing claimants
|
| £ | £
| £ | £ | £
| £ | £ |
|
| Existing claimant: | |
| | |
| | |
| June 1998 | 81.60 | 43.89
| 8.80 | 245.69 | 133.00
| — | — |
| October 1999 | 126.10 | 21.18
| 1.81 | 260.49 | 147.80
| +14.80 | +14.80 |
| | |
| | | |
|
| New claimant: | |
| | | |
| |
| June 1998 | 81.60 | 43.89
| 8.80 | 240.04 | 127.35
| -5.65 | 5.65 |
| November 1998 | 84.10 | 43.89
| 8.80 | 242.54 | 129.85
| +2.50 | 3.15 |
| April 1999 | 84.10 | 43.89
| 8.80 | 245.04 | 132.35
| +2.50 | -0.65 |
| October 1999 | 126.10 | 17.69
| 0.74 | 252.78 | 140.09
| +7.74 | +7.09 |
|
| If her hours were increased to 35 with net weekly earnings of £150
|
|
| lDate | FC/WFTC | HB
| CTB | Total income | After childcare
and housing costs
| Net
gain/loss | Position relative to existing claimants
|
| £ | £
| £ | £ | £
| £ | £ |
|
| Existing claimant: | |
| | |
| | |
| | |
| | | |
|
| June 1998 | 84.70 | 11.23
| — | 272.33 | 159.64
| — | — |
| October 1999 | 103.90 | —
| — | 280.30 | 167.61
| +7.97 | +7.97 |
| | |
| | | |
|
| New claimant: | |
| | | |
| |
| June 1998 | 84.70 | 7.75
| — | 263.20 | 150.51
| -9.13 | -9.13 |
| November 1998 | 87.20 | 7.75
| — | 265.70 | 153.01
| +2.50 | -6.63 |
| April 1999 | 87.20 | 7.75
| — | 268.20 | 155.51
| +2.50 | -4.13 |
| October 1999 | 103.90 | —
| — | 277.15 | 164.46
| +8.95 | +4.82 |
|
| Comment: This lone parent gains substantially from the Childcare Tax Credit at lower levels of earnings. This was not available under 7Family credit (FC) for lone parents receiving the maximum FC. However, despite her cash gains, in November and April, the income loss due to benefit cuts is not lessened until April 1999 when earning £85 and is not fully eliminated until October 1999. By October 1999, a lone parent earning £85 net a week is still £7.71 worse-off than a lone parent who has not lost lone parent benefits. If earning £150 net a week, she is £3.15 worse-off than if she were a protected claimant still getting these benefits.
|
REFERENCE
1 Ford R and Millar J (Eds) (1998) Private Lives
and Public Responses, London: PSI; and HC Deb 4 December 1997,
col. 328w.
2 Marsh A, Ford R, and Finlayson L (1997) Lone Parents,
Work and Benefits, London: The Stationery Office.
3 Bradshaw J et al (1996) The Employment
of lone parents: a comparison of policy in 20 countries, Family
Policy Studies Centre.
4 Labour Force Survey, December 1997 (taken from: Table
B.11, Labour Market Trends, June 1998) Office for National Statistics.
5 Armitage B and Scott M (1998) British Labour Force
Projections: 1998-2011, Labour Market Trends, June 1998, ONS.
6 Naylor K (1994) Part-Time Working in Great Britain—an
historical analysis, Employment Gazette, December.
7 Dex S and McCulloch A (1995) Flexible Employment
in Britain: A Statistical Analysis, EOC.
8 ONS (1998) Living in Britain: Results from the
1996 General Household Survey, London: The Stationery Office,
Table 4.9
9 Marsh, Ford and Finlayson (1997) Op cit.
10 Ford R, Marsh A and McKay (1995) Changes in Lone
Parenthood, DSS, London: HMSO.
11 Bradshaw J, et al (1996) Op cit.;
and Shaw A, et al (1996) Moving Off Income Support: Barriers
and Bridges, London: HMSO.
12 ONS (1998) Living in Britain: Results from the
General Household Survey 1996 London, Table 2.7., London:
The Stationery Office.
13 HC Deb 30 October 1997, col. 854w.
14 Labour Force Survey, Spring 1997, derived from:
Macdermott, Garnham and Holtermann (1998) Real Choices for
lone parents and their children, CPAG.
15 Bradshaw J, et al (1996) Ibid.
16 Millar J, Webb S and Kemp M (1997) Combining
Work and Welfare, York: Joseph Rowntree Foundation.
17 Kemp M, Webb S and Millar J (1997) The Changing
Face of Low Pay, The New Review, Low Pay Unit.
18 ONS (1997) Social Trends 27, London: The
Stationery Office
19 Marsh A, Ford R and Finlayson L (1997) Ibid.
20 Low Pay Unit (1997) Home Alone, Working Brief,
LPU.
21 Equal Opportunities Commission (1997) Facts About
Women and Men 1997, Manchester, EOC.
22 Pile H and O'Donnell C (1997) from: Britain Divided,
London: CPAG Ltd.
23 HC Deb 21 January 1998, cols. 567-8w.
24 Low Pay Unit, The New Review, Sep/Oct 1997, LPU.
25 Bryson, A and Marsh, A (1996) Leaving Family
Credit, London: HMSO.
26 Marsh A, Ford R, and Finlayson L (1997) Ibid.
27 DSS (1998) Family Credit Statistics, Quarterly Enquiry,
November 1997, London: DSS
28 DSS (1996) Social Security Statistics, London: The
Stationery Office.
29 ONS (1997) National Earnings Survey, London: The
Stationery Office.
30 Oppenheim C and Harker L (1996) Poverty the Facts,
London: CPAG.
31 ONS, Social Trends, 1996, The Stationery Office.
32 Marsh A, Ford R, and Finlayson L (1997) Ibid.
33 Marsh A, Ford R, and Finlayson L (1997) Ibid.
34 Marsh A, Finlayson L and Ford R (1997) Working
paper: Estimating the incentive to work and claim Family Credit—Changes
since 1991, London: Policy Studies Institute.
35 Bryson A (1998) Lone Mothers' Earnings in: Ford
and Millar (Eds), Private Lives and Public Responsibilities,
Chapter 10, PSI.
36 Bryson A and Marsh A (1996) Op cit.
37 Pile H and O'Donnell C (1997) Op Cit.
38 DSS, Tax/Benefit Model Tables, April 1998,
Government Statistical Service.
39 DSS, Tax/Benefit Model Tables, April 1998,
Government Statistical Service.
40 Sutherland, H (1998) After the Minimum Wage:
social security for working families with children, Poverty,
No. 99, CPAG.
41 Institute for Fiscal Studies, 18 March 1998, Post
Budget Briefing Notes, IFS.
42 Dilnot A and McCrae J (1998) Submission to the Social
Security Committee, London: IFS.
43 Dilnot A and McCrae J (1998) Op Cit.
44 HC Deb 8 April 1998, cols. 388-389w.
45 Currently, some two and a half million home owners
on low wages have net incomes below income support levels—see;
Wilcox S and Sutherland H (1997) Housing benefit, affordability
and work incentives: options for reform, National Housing
Federation.
46 DfEE/DSS/Ministers for Women. (May 1998) Meeting
the Childcare Challenge: A Framework and Consultation Document,
Cm 3959, p.12.
47 Nobel M et al (1998) Lone Mothers Moving
In and Out of Benefits, York: Joseph Rowntree Foundation
48 Letter to NCOPF from DSS Analytical Services Division
1, 31 March 1998.
49 Shaw et al (1996), Moving Off Income Support:
Barriers and Bridges, DSS, London: HMSO.
50 Bradshaw J, et al (1996) Ibid; and
Shaw A, et al (1996) Op cit.
51 Marsh A, Ford R, and Finlayson L (1997) Ibid.
52 Ford R, Marsh A and S McKay (1995) Op cit.
53 Bryson A, Ford R, and White M (1997) Op cit.
54 Bryson A, Ford R and White M (1997) Ibid.
55 Shaw A, et al (1996) Ibid.
56 Ford R, Marsh A, and McKay S (1995) Ibid.
57 Bryson A, Ford R and White M (1997) Ibid.
July 1998
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