§ Benefit under any Act of the present Session establishing a Ministry of Social Security and providing for benefits eligibility for which is to be determined by a Supplementary Benefits Commission established by the Act, or under any Act of the Parliament of Northern Ireland providing for corresponding benefits, shall not be regarded as income for any income tax purposes.—[Mr. Diamond.]
§ Brought up, and read the First time.
§ The Chief Secretary to the Treasury (Mr. John Diamond)
I beg to move, That the Clause be read a Second time.
This is a straightforward and simple Clause and has the distinction of meaning just what it says. Moreover, it will be observed that it says it in plain and intelligible English.
As hon. and right hon. Members will know, the reason for the Clause is the change in the system relating to National Insurance payments. Under the existing law, those payments are not treated as liable to Income Tax, because they are regarded as compassionate payments made subject to a needs test and not as income within the Income Tax sense of the word.
A new system is being brought in under the two Measures mentioned and the benefit payable will take the place of National Assistance and will be called supplementary pension when the recipient has reached pensionable age and supplementary allowances in other cases. Because of the provisions relating to those supplementary pensions and allowances, it might be thought, unless provision were made to the contrary, that because a person had a clear 2242 statutory title to the benefit the benefit would be taxable.
The Clause makes it perfectly clear that it is not to be taxable, because, in effect, it is in the place of the present allowances which are not themselves taxable. Similarly, it will not be regarded as income of the person in receipt of it for the purpose of dependent relative allowance and other allowances which have regard to the income of the recipient.
I think that that is sufficiently clear. The matter is very straightforward, and everybody is very wide-eyed, bright and perceptive.
§ Question put and agreed to.
§ Clause read a Second time and added to the Bill.