Direct assessments and advantages

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Review. Pre reported duty changesChild destitution packageOne-off ascent in winter remittance for 60 Distributional effect of all progressions. Pre declared duty changes. Financial plan 2007 declared a few changes to become effective from April 2008:Abolition of 10% beginning rate of pay taxBasic rate of pay tax reduction from 22% to 20%Increase in Upper Earnings Limit in National InsuranceIncrease in Working Tax

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Slide 1

Coordinate assessments and advantages James Browne

Slide 2

Overview Pre declared duty changes Child neediness bundle One-off ascent in winter remittance for 60+ Distributional effect of all progressions

Slide 3

Pre reported expense changes Budget 2007 declared a few changes to happen from April 2008: Abolition of 10% beginning rate of pay duty Basic rate of wage tax reduction from 22% to 20% Increase in Upper Earnings Limit in National Insurance Increase in Working Tax Credit edge Increase in Pensioner Tax Allowances Increase in kid component of Child Tax Credit

Slide 4

Child destitution targets Pledge to nullify tyke destitution by 2020, middle of the road focuses in transit 2004-05 Target Cut number of youngsters in destitution (<60% of middle pay) by ¼ contrasted and 1998/99 Missed, and tyke destitution expanded in 2005-06 2010-11 Target Cut tyke destitution by ½ contrasted and 1998/99

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Child neediness bundle Confirmed work scan prerequisites for solitary guardians on advantage whose most youthful kid matured 7+ by 2010-11 Child advantage to reach £20/wk for first tyke in April 2009 57p/wk genuine ascent. Costs £170m in 2010-11. Tyke component of youngster expense credit will ascend by £50/yr in April 2009. Costs £350m in 2010-11. Tyke advantage ignored in lodging advantage/gathering tax cut Costs £350m in 2010-11

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Child advantage neglect Child advantage slighted in lodging advantage/committee tax break HB and CTB implies tests diminish advantage by 85p for each pound of pay Beneficiaries pick up to 85% of youngster advantage got (£17 in 2009 for 1 kid family) Families on full HB/CTB unaffected Increases pick up to work for solitary guardians/one worker families Similar measure prescribed in IFS/OPF-Gingerbread look into Also "principal audit of the working age Housing Benefits framework"

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Impact of dismissing kid advantage in HB/CTB Assumes: 2 kids matured 7 and 5, no childcare, the lowest pay permitted by law, lease of £80/wk, CT of £17.22/wk

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Prospects for 2010-11 After PBR 2007, we evaluated government would miss focus by 700,000 with no new strategies, and shutting the crevice could cost £3.4bn Treasury say measures in Budget 2008 cost £870m in 2010/11 and are assessed to lift 250,000 out of neediness. We comprehensively concur with this evaluation Significant stride forward, yet at the same time 450,000 away Welfare changes because of effect solitary guardians may help, however without considerably bigger kid destitution bundle in Budget 2009, hitting target looks to a great degree impossible

Slide 9

Prospects for 2010-11

Slide 10

Winter fuel stipend: a concise history

Slide 11

Distributional effect of spending measures

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Distributional effect of spending measures by family sort

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Income assess & National Insurance changes

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Effect of pre-reported changes on a solitary parent with 2 kids