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Welfare Reform on the Web (May 2001): Social Security - UK

1M MIDDLE-INCOME EARNERS CAUGHT IN BROWN'S TRAP

G. Jones

Daily Telegraph, Mar 9th 2001, p.1 + 2+ 4

The increase in the upper earnings limit for National Insurance (NI) announced in the 1999 Budget will adversely affect people earning between £29,000 and £33,000 a year. Someone earning £30,000 a year will save £43 from the extension of the 10% tax band and £33 from the extension of the personal allowance announced in the 2001 budget. However, as a result of their higher NI contributions they will be paying out an extra £150.80 in NI contributions, leaving them £74.80 worse off.

AT LAST, A FAIR DEAL FOR MOTHERS, IN WORK AND AT HOME

M.A. Sieghart

Times, Mar 5th 2001, p.30

Gordon Brown's budget will make a big difference to women in lower and middle income families with much of their childcare costs being paid by the state along with their partner's boost in income. Maternity pay will be increased to £100 a week in 2003, for 26 weeks rather than 18 and will go to all mothers. Goes on to discuss the cut-off point for women on high incomes.

BABY CREDIT WORTH UP TO £1,000 FOR ALL BUT WEALTHIEST

R. Bennett

Financial Times, Mar 8th 2001, p.5

The Chancellor has introduced a "new baby credit" worth up to £1,000 for all but the wealthiest households. This is in addition to rises of maternity pay and leave for both parents and the introduction next month of the children's tax credit. The moves have been welcomed by the Women's Budget Group and the Equal Opportunities Commission.

THE CHANCELLOR SHOWS OFF HIS GENEROSITY AT OUR EXPENSE

N. Collins and C. Fildes

Daily Telegraph, Mar 8th 2001, p.22

Discusses the 'Sure Start Maternity Grant', the babies tax credit, children's tax credit and the two weeks' paid paternity leave for fathers. It goes on to discuss how these benefits are to be paid for and who else has benefited from this budget.

CHILD POVERTY: AN END IN SIGHT?

G. Fimister (ed.)

London: Child Poverty Action Group, 2001

Computer modelling of the impact of government policies suggests that reforms to the tax and benefit systems in the past two years will lift 1.2m children out of poverty. A further 320,000 may have been lifted out of poverty as a result of their parents obtaining employment.

CHILDREN'S TAX CREDIT IMPROVED

Financial Times, Mar 8th 2001, p.21

Discusses the government's commitment to improving support for families with children, targeting those who need the help most. The Children's Tax Credit will be worth £520 a year, or £10 a week when it is introduced in April. This will be raised in April 2002 for those who have a new child by £10 a week for families in the year of a child's birth.

A COMMENTARY ON THE PENSION CREDIT PROPOSALS

Pension Provision Group

[Harrow, Middx]: 2001

Argues that the government's proposed Pension Credit would help top-up the incomes of existing pensioners with small private pensions or modest savings, but will be unsustainable in the long-term. It could reduce the incentive to save for old age and will undermine the government's declared aims of reducing reliance on means-tested benefits and encouraging private provision for old age. The Group proposes making the scheme transitory so that today's pensioners are helped but today's workers have a clear incentive to save for their retirement.

THE DRAFT SOCIAL SECURITY (INHERITED SERPS) REGULATIONS 2001

Committee of Public Accounts

London: TSO, 2001 (House of Commons papers. Session 2000/01; HC243)

Committee examined:

  • whether the proposals in the Regulations are equitable;
  • whether the costings of the proposals are soundly based;
  • whether the changes will be adequately publicised;
  • the management of the risks of implementation.

FAMILIES ARE AMONG THE MAIN BENEFICIARIES

R. Bennett

Financial Times, Mar 8th 2001, p.10

One of the main beneficiaries of Gordon Brown's Budget were families with childrens tax credit beginning in April, more generous maternity leave for mothers and fathers and a 'baby bonus' from 2002. In addition families on low-incomes will see a rise in the Sure Start Maternity Grant, Working Families Tax Credit, help with child care costs and a modernisation of the system of zero-rating of childrens clothing and footwear.

FAMILIES FAIL TO TAKE UP TAX CREDITS

P. Jenkins and E. Crooks

Financial Times, Mar 9th 2001, p.1

The Inland Revenue has confirmed that nearly 1 million eligible people have failed to register for the new Children's Tax Credit. This news strengthens criticism of the growing complexity of the tax system, which means that individuals and businesses are often unaware of the tax breaks to which they are entitled, or find claiming too difficult.

HAGUE REDUCES CLAIM FOR MARRIAGE TAX PLAN

T. Baldwin

Times, Feb 22nd 2001, p.12

The Tories have admitted that their plans for tax breaks for married parents with children under 11 would benefit only one in six couples. This admission followed concerted attacks on the scheme by child poverty groups and the government.

(See also Guardian, Feb 22nd 2001, p.13; Independent, Feb 22nd 2001, p.8).

INCREASE IN MATERNITY PAY TO GUARANTEE £200 A WEEK

Financial Times, Mar 8th 2001, p.21

Article discuss the measures announced in the budget that will benefit working parents. These benefits included an increase in the flat rate of Statutory Maternity Pay (SMP) and Maternity Allowance, an extension of paid maternity leave from 18 weeks to 26 weeks, two weeks paid paternity leave for fathers and paid adoption leave. The article goes on to discuss how small businesses can claim compensation for administering maternity leave.

INHERITED SERPS

Social Security Committee

London: TSO, 2001 (House of Commons papers, Session 2000/01; HC215)

Endorses government's proposed new rules on how much SERPS (State Earnings Related Pension) a widow or widower may inherit on the death of their spouse.

PARENTS AND POORER CHILDREN FIRST

N. Timmins

Financial Times, Mar 8th 2001, p.14

Discusses Gordon Brown's slow but steady redistribution towards the less well-off, especially those families with children. Article goes on to discuss the clever politics surrounding the many benefits that families and children gained from this budget.

PENSIONERS' SCHEME NOT SUSTAINABLE, SAY ADVISERS

N. Timmins

Financial Times, Mar 6th 2001, p.4

The Pension Provision Group has advised government that its planned Pensioners' Tax Credit will in the long term reduce the incentive to save for old age, encourage early retirement and put many more people onto means-tested benefits.

PORTILLO PLEDGES AN EXTRA £200 CHILD TAX CREDIT

G. Jones and A. Sparrow

Daily Telegraph, Feb 20th 2001, p.10

The Conservatives have promised that they would, if elected, retain the Children's Tax Credit and increase its value by £200 a year for families with a child under five.

(See also Guardian, Feb 20th 2001, p.12).

STATE EARNINGS-RELATED PENSION SCHEME (SERPS) INHERITANCE PROVISIONS: REDRESS FOR MALADMINISTRATION

Parliamentary Commissioner for Administration

London: TSO, 2001 (House of Commons papers. Session 2000/01; HC271)

Expresses satisfaction with government proposals announced on 29th November 2000 for the amendment of rules governing the entitlement of widows or widowers to inherit their late spouses additional pension under the SERPS scheme. Considers that these proposals offer reasonable reddress for earlier maladministration by the Department of Social Security and the Benefits Agency.

TORY TAX CUT FOR MARRIED PARENTS

P. Webster

Times, Feb 21st 2001, p.1

The Conservatives are proposing a tax cut of up to £1000 a year for married couples where one partner gives up work to look after young children or a sick relative. Couples would be able to transfer their unused personal allowances to the working partner at the basic rate.

(See also Daily Telegraph, Feb 21st 2001, p.1 + 2; Guardian, Feb 21st 2001, p.3).

WILLETTS PROMISES TO HUNT DOWN MISSING MILLIONS

J. Landale

Times, Feb 26th 2001, p.10

The Conservatives are promising that, if elected, they would crack down on use of false National Insurance numbers to fraudulently claim benefits. Plans would include matching the data on the Benefits Agency's Central Index with the Contribution Agency's NIRSZ database. People with National Insurance accounts that appeared suspicious would be asked to provide secure forms of identification.

WORK IN PROGRESS: CAB CLIENTS' EXPERIENCES OF WORKING FAMILIES TAX CREDIT

J. Wheatley

London: National Association of Citizens' Advice Bureaux, 2001

Report claims that some employers have sacked workers rather than administer the Working Families Tax Credit (WFTC). In other cases parents felt cheated when they found that their tax credit meant that they lost free school meals and Council Tax and Housing Benefit.