1-1 of 1 results for subject:Uprating
Librarians' tools
- Search time
- 0.18 seconds
- Solr query time
- 0.003 seconds
- Search query
- subject:Uprating
- We searched for
- subject_t:Uprating OR subject_ses:93390
Type
House
Session
Year
Department
Member
Primary member
More
Taylor of Goss Moor, Lord (1)
Answering member
Legislative stage
Legislation
Subject
Publisher
To ask the Secretary of State for Work and Pensions, if he will estimate the cost to the Exchequer, net of savings in means-tested benefits and of non-introduction of the pension credit and of additional income tax revenue, of an increase of £5 per week in the basic state pension...
To ask the Secretary of State for Work and Pensions, if he will estimate the cost to the Exchequer, net of savings in means-tested benefits and of non-introduction of the pension credit and of additional income tax revenue, of an increase of £5 per week in the basic state pension...
Asked by
Lord Taylor of Goss Moor
(Liberal Democrat)
Answered by
Ian McCartney
(Labour)
Answering body
Department for Work and Pensions
Type
Written questions
Status
Answered
Tabled on
27 January 2003
For answer on
10 March 2003
Answered on
10 March 2003
Matthew Taylor: To ask the Secretary of State for Work and Pensions if he will estimate the cost to the Exchequer, net of savings in
means-tested benefits and of non-introduction of the pension credit and of additional income tax revenue, of an increase of £5 per
week in the basic state pension together with the introduction of age additions of £5 per week at age 75-79 and £10 per week at age
80 years and over, on the basis that the age additions for those aged 75 to 79 and 80 years and over are paid in full, regardless of
contribution record. [94404]
Mr. McCartney: Our priority is to target help on those current pensioners who have the lowest incomes. While it is true that older
pensioners tend to be poorer on average, income inequality is far more pronounced across the whole pensioner population than between
pensioners of different ages. For example, the median net income of the richest fifth of pensioner couples is around four times that
of the poorest fifth.
Age additions are not the most effective way to target those pensioners with the lowest incomes. For example, just under half of all
minimum income guarantee claimants are aged under 75.
From October 2003, the poorest third of pensioner households will have gained over £1,500 a year in real terms as a result of the
reforms introduced by this Government.
If the maximum rate payable of the basic state pension was increased by £5 per week and weekly age additions of £5 were introduced
for people aged 75-79 and £10 for people aged 80 and over in 2003-04, we estimate that the increase in public expenditure could be
in the region of £0.5bn. This assumes that pension credit is not introduced and spending is re-directed into the basic state
pension. It is also calculated on the generous assumption that consequent savings in other benefits and any additional tax yield are
channelled back into the basic state pension.
In this scenario, many of the poorest pensioners are no better off than they would have been under pension credit because their
increased basic state pension is completely offset by the reduction in their minimum income guarantee. Instead, expenditure is
targeted on those further up the income distribution. In addition many pensioners with modest private pension provision would be
worse off under this scenario than under pension redit.
For example, a person aged 75 is receiving a full basic state pension and has a small private pension worth £10 per week. Under
these proposals, they would receive a basic state pension of £87.45, plus their private pension of £10 per week and would be topped
up to £102.10 by the minimum income guarantee.
Under pension credit they would receive £77.45 from the basic state pension and would still be topped up to the guarantee of
£102.10. However in addition they would also receive a savings credit of £6 per week, giving a total weekly income of £108.10. This
person is over £300 per year better off under pension credit than under the suggested proposals.
Notes:
1. Estimates are in cash terms for Great Britain and are rounded to the nearest £0.5bn.
2. The estimate takes account of offsetting savings in income related benefits and additional tax yield. Income related benefit
offsets are calculated using the Department for Work and Pensions Policy Simulation Model for 2003/04. Additional tax yield is
calculated by the Inland Revenue based upon the Survey of Personal Incomes2000/01, projected to 2003/04.
3. Calculations assume the maximum rate payable of the Basic State Pension is increased by £5 per week and all other payments
proportionately and that age additions of 5 per week are paid to all those aged 75-79 and £10 per week to those aged 80 and over.
4. For modelling purposes, the pension credit is assumed to be in place throughout2003/04. In fact, the pension credit will begin in
October 2003.
5. Projections of distributional consequences for 2003/04 are subject to a variety of assumptions and should be treated with
caution.
Source: Department for Work and Pensions calculations.
Subjects
Costs; Income support; Pension credit; Pensioners; Poverty; Means-tested benefits; State retirement pensions; Uprating
Date
10 March 2003
Reference
94404; 401 c94-5W
House
House of Commons