Another attempt at explaining that Frank Field calculation from Mark W via email:
Frank Field used DWP’s Tax and Benefit Model Table 1.3g, which
gives £486.59 (nett pre costs) for 16 hours NMW, a perfect match for
his £487 splash; but that includes credit (but not payment) for
£100/week childcare. He then compared this with Table 1.6d, same except
married-couple with no childcare; to exceed £487 nett here you need
£620 gross earning – at £5.35 NMW this makes 115.9 hours, again a
perfect match for his incorrect 116 hour claim. (this explanation by
Rwendland at LabourHome).
gives £486.59 (nett pre costs) for 16 hours NMW, a perfect match for
his £487 splash; but that includes credit (but not payment) for
£100/week childcare. He then compared this with Table 1.6d, same except
married-couple with no childcare; to exceed £487 nett here you need
£620 gross earning – at £5.35 NMW this makes 115.9 hours, again a
perfect match for his incorrect 116 hour claim. (this explanation by
Rwendland at LabourHome).
It can be argued that childcare costs should not count as
household income/welfare spending, in the same way as the "free" state
education does not so count. So, let’s look at post-housing,
post-childcare incomes instead. Our single Mum from Table 1.3g has £209
post housing/childcare income. On the basis of eqivalised incomes, a
two-adult, two-child household needs a 40% higher income, i.e. £293 per
week. To arrive at a post-housing/childcare income of £293, the
single-earner in Table 1.6d needs to earn £600 gross, or 112 hours at
the NMW. So Frank Field was pretty close whichever way you argue it.
household income/welfare spending, in the same way as the "free" state
education does not so count. So, let’s look at post-housing,
post-childcare incomes instead. Our single Mum from Table 1.3g has £209
post housing/childcare income. On the basis of eqivalised incomes, a
two-adult, two-child household needs a 40% higher income, i.e. £293 per
week. To arrive at a post-housing/childcare income of £293, the
single-earner in Table 1.6d needs to earn £600 gross, or 112 hours at
the NMW. So Frank Field was pretty close whichever way you argue it.
Or to look at in the way Patricia Morgan does, if Single Mum meets
Unemployed Man, and he moves in, how many hours does he have to work to
keep total income at same level? Her household’s net income is
currently £209 and his is £57 (Income Support rate, 2006-07), makes
£266. Go back to Table 1.6d, find £266 in the post housing/childcare
column, that’s £500 gross he needs to earn, or 93 hours at NMW.
Unemployed Man, and he moves in, how many hours does he have to work to
keep total income at same level? Her household’s net income is
currently £209 and his is £57 (Income Support rate, 2006-07), makes
£266. Go back to Table 1.6d, find £266 in the post housing/childcare
column, that’s £500 gross he needs to earn, or 93 hours at NMW.
So the message is, if Unemployed Boyfriend moves in and Single Mum
gives up work to look after kids, he has to work at least 93 hours (and
give up his free social housing) for them to break even. If that’s not
discouraging work and marriage then I don’t know what is.
gives up work to look after kids, he has to work at least 93 hours (and
give up his free social housing) for them to break even. If that’s not
discouraging work and marriage then I don’t know what is.
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