Supplementary memorandum from Every Disabled
Every Disabled Child Matters is a campaign by
four leading organisations working with disabled children and
their familiesContact a family, Council for Disabled Children,
Mencap and the Special Educational Consortium.
The committee asked for examples of situations
in which it is not economically viable for families to return
to work, because of the loss of benefits which would follow from
that decision. Below are two examples from the Contact a Family
helpline of parents who found themselves in just that situation.
Please note that the following examples calculate
benefit entitlement in work, once any initial run-on in HB/CTB/mortgage
interest and the carer premium ends. Family Income and help available
with housing costs is likely to be higher in the initial 8 weeks
after starting work.
Case Study 1
Mrs A lives with her partner and two children
aged 12 and 7. Both children receive DLA at the high rate for
both components. Mrs A and her husband both receive Carer's Allowance
of £48.65 per week. They also receive Child Benefit, Child
Tax credit of £213 per week and Income Support of £49.80
per week (not including housing costs). The family live in a shared
ownership property and receive a full council tax rebate (£15pw)
and full rent rebate (£70pw) towards their share of the rent.
They also qualify for additional income support payments of £50
per week towards mortgage interest.
|Current income (DLA disregard)||Help with housing costs
|£48.65 CA||£15.00 CTB
|£48.65 CA||£70.00 HB
|£30.20 CB||£50.00 mortgage interest
Mrs A has been offered a job working 18 hours a week and
earning £125 per week net. She will have no childcare costs.
If she takes up this opportunity the family income will increase
as a result of her earnings and the fact that she will qualify
for working tax credit of £65.96. However on the other hand
she will no longer qualify for Carers Allowance or income support
(including payments towards mortgage interest). In addition she
would lose all of her council tax rebate and have to pay the first
£60 of her weekly rent charge.
|Prospective income||Help with housing costs
|£48.65 CA||£8.18 HB
Although Mrs A's income will increase by £92.45 per
week, she will have to pay an extra £126.82 per week in housing
costs and council tax. This will leave her almost £35 per
week worse off. In addition she will no longer qualify for help
with free school meals for her children.
|Full Income Support calculation
|£92.80 personal allowance||£99.55 earnings (after disregards of £10 + £15.45)
|£27.15 carer premium (husband)||£65.96 WTC
|£50.00 mortgage interest||£48.65 CA
|No IS entitlement||
|Full HB/CTB calculation||
|£92.80 Personal allowance||£99.55 earnings (after disregards of £10 + £15.45)
|£27.15 carer premium (husband)||£278.90 WTC + CTC
|£94.90 2 children||£48.65 CA
|£16.43 family premium||£30.20 CB
|£93.38 disabled child premium x2||£457.30
|£37.52 enhanced disability premium x2
|£457.30£362.18 = £95.12
|£95.12 x 65% = £61.82 per week rent to be paid
|£95.12 x 20% = £19.02, so pays full council tax of £15pw
Case Study 2
Ms B is a lone parent with 3 children all aged between 2-4yrs.
One of her 2 year old twins receives DLA middle rate care component.
Ms B's weekly benefit payments are Child Benefit of £42.30,
Child Tax Credit of £163, Carers Allowance of £48.65,
and income support of £37.65. She also receives full rent
(£140) per week and council tax (£18.75pw) rebates.
Does not receive maintenance.
|Current income||Help with Housing
||Childcare costs incurred
|£48.65 CA||£140.00 HB
|£37.65 IS||£18.75 CTB
Ms B is offered employment working 35 hours a week and receiving
£200 per week net. She is keen to take up this post but this
will mean incurring childcare costs of £360 a week for her
If she starts to work, Ms B will lose her Carer's Allowance
and income support. However she will have additional income in
the form of earnings and working tax credit. She can expect to
receive working tax credit of £319.51 per week. This includes
a childcare element of £240 per week, the maximum amount
of help allowable with childcare costs. Although she will lose
all help with council tax benefit she will still get a partial
rent rebate of £61.61, leaving her to pay £78.39 of
her weekly rent charge.
|Prospective income||Help with Housing
||Childcare costs incurred
|£200 earnings||£61.61 HB
Although Mrs B's income would increase by £433.21, she
would incur substantial new costs of £360 towards childcare
and £97.14 towards rent/ council tax. As a consequence she
would be left £23.93 per week worse off.
|Full HB/CTB calculation||
|£59.15 personal allowance||£200.00 earnings
|£142.35 3 children||£483.36 WTC + CTC
|£16.43 family premium||£42.30 CB
|£46.69 disabled child premium||£725.66 Total
|£25.00 earnings disregard
|£15.45 30 hour disregard
|£385.23264.62 = £120.61
|£120.61 x 65% = £78.39 rent to pay; £14078.39 = 61.61 HB
|£120.61 x 20% = £24.12, so pays full council tax of £18.75pw
The above examples, which are representative of calls to
the Contact a Family helpline, illustrate some problem areas within
the benefits system.
Firstly, the only help with mortgage interest payments is
through the Income Support system for people not in work. The
Housing Benefit system, which does help those in work on low incomes,
only covers rent and not mortgage costs.
Secondly, there is a standard allowance for childcare costs
in the tax credit system. Childcare for disabled children costs
up to five times as much. Many families with disabled children
therefore cannot afford to take lower paid employment.