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Dept of Social Security

Answer

Dr. Lynne Jones: To ask the Secretary of State for Social Security what assessment she has made, and on the basis of what sources of information, of the difference in incomes between lone parents on income support and those in work (a) before and (b) after child care costs are taken into account. [19703] Mr. Keith Bradley: Estimates by the independent Policy Studies Institute indicate that the weekly income for lone parents already in work and receiving Family Credit is likely to be, on average, over £50 more than their estimated income on Income Support. This estimate is based on a 1994 sample of lone parents in work, adjusted by the Policy Studies Institute to take account of two subsequent policy changes (the introduction of the childcare disregard in all in-work benefits in October 1994 and the introduction of a 30 hour credit in Family Credit in July 1995) and the annual uprating of benefit levels. It does not take account of changes announced in June 1997 to extend the child care disregard further. The £50 per week estimate is before in-work costs which, excluding child care costs, averaged £5 per week; 79 per cent. were not paying for child care. Some 21 per cent. of the sample were paying for child care. After allowing for in-work costs, including the costs of child care, this group is on average over £18 per week better off in work than on Income Support. These figures are, however, based on a small sample and should be treated with caution. Direct comparisons between out of work income and in-work income for those lone parents currently receiving Income Support are difficult. It is not straightforward to predict the earnings of those lone parents who move into work since this would depend on the type of job they might get, and for how many hours. In addition, it is not possible to predict what child care costs they might have. In order to ensure that more lone parents are better off financially in work, the Government will implement a National Minimum Wage and National Child Care Strategy, reforming the tax and benefit systems, provide extra help with the cost of child care and access to lifetime learning. It is important to recognise, though, that the financial return from working is not the only consideration which lone parents make in deciding to work. Qualitative research indicates that some lone parents choose to work in part to provide a role model for their children, and to take them away from dependency on benefit. The New Deal for Lone Parents will provide practical help and advice for the lone parents on Income Support who want to move into work. As part of the New Deal service, lone parents who have been offered work, and have been advised of their earnings, can ask their Personal Adviser for an estimate of their likely entitlement to Family Credit and other in-work benefits. The evaluation of the programme includes a quantitative survey of a sample of participants in all eight areas of the scheme which will collect systematic information from lone parents on how much actually better off they are in work.

Secondary information

Type

Written question

Reference

19703; 303 c237-8W

Session

1997-98

Subjects

Childcare Income support Personal income Recipients Lone parents Social security benefits New deal for lone parents Policy Studies Institute

Contains statistics

Yes