The net income for an employed married person, with a non-working spouse and three children, earning gross incomes at £1,000 intervals between £6,000 and £16,000 per annum is shown in the following table. This table also sets out the additions to and deductions from gross income in arriving at levels of net income.
It is estimated that an unemployed married person with three children would have a net income of £7,124 per annum when account is taken of all allowances, including secondary benefits, medical card, and the costs of local authority differential rent and work-seeking. When this is compared with the information in the table it is clear that at all gross incomes between £6,000 and £16,000 this person is better off in work rather than in unemployment. Indeed the married person described would be better off in work at any level of earnings from employment when his earnings and family income supplement are taken into account.
The Government recognises that adjusting the tax and welfare systems to improve the operation of the labour market is an important policy objective. In recognition of the considerable complexities involved, the Government set up a working group of experts in the tax and social welfare area to look at these issues with a view to developing a strategic approach to the closer integration of the tax and social welfare systems. The Government is awaiting the Group's final report.
