Pensions

House of Lords written question – answered at on 13 March 2012.

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Photo of Baroness Lister of Burtersett Baroness Lister of Burtersett Labour

To ask Her Majesty's Government what are the currently used weekly cash amounts for the relative income thresholds set out in paragraph 7 of the response by the Government to the Second Report of the House of Commons Work and Pensions Committee of Session 2003-04, Cm 6200, including the figures for before and after housing costs and relative and absolute low income.

Photo of Lord Freud Lord Freud The Parliamentary Under-Secretary of State for Work and Pensions

Low-income thresholds are now calculated based on data for the United Kingdom, are equivalised using the modified OECD equivalisation factors and the absolute low-income threshold is based on 60% of the median equivalised household income in 1998-99. Table 1 shows the relevant thresholds, based on the 2009-10 Households Below Average Income series (the latest available).

Table 1: Latest relative and absolute low-income thresholds
Income threshold In 2009-10 prices (latest available)
Relative low-income (60% of 2009-10 median), Before Housing Costs £248
Relative low-income (60% of 2009-10 median), After Housing Costs £214
Absolute low-income (60% of 1998-99 median), Before Housing Costs £209
Absolute low-income (60% of 1998-99 median), After Housing Costs £173

Source: Households Below Average Income series

Notes:

1. These statistics are based on 2009-10 Households Below Average Income (HBAI) data sourced from the Family Resources Survey (FRS). This publication used disposable household income, adjusted using modified OECD equivalisation factors for household size and composition, as an income measure as a proxy for standard of living.

2. Net disposable incomes have been used to answer the question. This includes earnings from employment and self-employment, state support, income from occupational and private pensions, investment income and other sources. Income tax payments, National Insurance contributions, council tax-domestic rates and some other payments are deducted from incomes.

3. Figures have been presented on a Before Housing Cost and an After Housing Cost basis. For Before Housing Costs, housing costs are not deducted from income, while for After Housing Costs they are.

4. All estimates are based on survey data and are therefore subject to a degree of uncertainty. Small differences should be treated with caution as these will be affected by sampling error and variability in non-response.

5. The reference period for HBAI figures is the financial year. These statistics cover the United Kingdom.

6. Incomes are given in pounds per week rounded to the nearest pound. Figures have been uprated using the relevant RPI-based inflation factors.

The reply by the Government to the Second Report of the Work and Pensions Select Committee, Session 2003-04 was published in June 2004. The latest available low-income statistics available at that time covered 2002-03. These estimates were based on data for Great Britain, were equivalised using the McClements equivalisation factors and the absolute low-income threshold was based on 60% of the median equivalised household income in 1996-97. The relevant thresholds in 2002-03 prices are shown below. Note that the updated figures in Table 1 above should be used in preference to those in Table 2 below.

Table 2: Relative and absolute low-income thresholds used in the reply by the Government to the Second Report of the Work and Pensions Select Committee
Income threshold (£ per week) In 2002-03 prices (used in the Government reply) In 2009-10 prices (latest available)
Relative low-income (60% of 2002-03 median), Before Housing Costs £194 £234
Relative low-income (60% of 2002-03 median), After Housing Costs £172 £205
Absolute low-income (60% of 1996-97 median), Before Housing Costs £166 £200
Absolute low-income (60% of 1996-97 median), After Housing Costs £140 £167

Source: Households Below Average Income series

Notes:

1. These statistics are based on 2002-03 Households Below Average Income (HBAI) data sourced from the Family Resources Survey (FRS). This publication used disposable household income, adjusted using McClements equivalisation factors for household size and composition, as an income measure as a proxy for standard of living.

2. Net disposable incomes have been used to answer the question. This includes earnings from employment and self-employment, state support, income from occupational and private pensions, investment income and other sources. Income tax payments, National Insurance contributions, council tax - domestic rates and some other payments are deducted from incomes.

3. Figures have been presented on a Before Housing Cost and an After Housing Cost basis. For Before Housing Costs, housing costs are not deducted from income, while for After Housing Costs they are.

4. All estimates are based on survey data and are therefore subject to a degree of uncertainty. Small differences should be treated with caution as these will be affected by sampling error and variability in non-response.

5. The reference period for HBAI figures is the financial year. These statistics cover Great Britain only.

6. Incomes are given in pounds per week rounded to the nearest pound. Figures have been uprated using the relevant RPI-based inflation factors.

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