Select Committee on Social Security Minutes of Evidence


Annex A.1

Example 1: One child aged seven. Father earns £315 net (equivalent to £400 pw gross in 1998); Housing costs £50 pw. Mother earns net as below, with £50 pw housing costs.


Mother net0 50100150 200300 400800

6th April 199879.2779.27 79.2774.0266.85 58.0047.9326.43
Green Paper47.2547.25 47.2547.2547.25 47.2547.2547.25
Reduction32.0232.02 32.0226.7719.60 10.75.68(20.82)
Per cent reduction40.4 40.440.436.2 29.318.51.4 -78.8

Example 2: Two children aged seven and 12: Father earns £315 net (equivalent to £400 pw gross in 1998); Housing costs £50 pw. Mother earns net as below, with £50 pw housing costs.

Mother net0 50100150 200300 400800

6th April 199892.9192.91 92.9192.5483.22 72.2265.9444.71
Green Paper63.0063.00 63.0063.0063.00 63.0063.0063.00
Reduction29.9129.91 29.9129.5420.22 9.222.94(18.29)
Per cent reduction32.2 32.232.231.9 24.312.84.5 -40.9

Example 3: Three children aged seven, 12 and 15: Father earns £315 net (equivalent to £400 pw gross in 1998); Housing costs £50 pw, mother earns net as below, with £50 pw housing costs.
Mother net0 50100150 200300 400800

6th April 199894.5094.50 94.5094.5094.50 86.9879.3467.05
Green Paper78.7578.75 78.7578.7578.75 78.7578.7578.75
Reduction15.7515.75 15.7515.7515.75 8.23.59(11.70)
Per cent reduction16.7 16.716.716.7 16.79.50.7 -17.4

The gross income figure taken for the father is £20,800, being mid-way between the average male manual and non-manual earnings figures given by the Department of Employment's New Earnings Survey 1997. The figure given for housing costs is arbitrary but, it is suggested, unlikely to be unrealistic. No other factors capable of allowance in the formula have been included.




 
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Prepared 19 October 1999