§ Mr. Gerry Fowler
asked the Secretary of State for Social Services upon what principle earnings-related supplement to462W
§ Mr. Deakins:
The numbers, relating to staff in the administration group in my Department. Department, are given in the table below:
unemployment benefit is calculated upon earnings arising in the last tax year before the benefit year, with a nine-month gap between the end of the tax year and the start of the benefit year, giving a possible 21-month interval between the time when the relevant earnings arose and the date when the supplement is drawn, while the minimum earnings level is recalculated each year to take account of inflation.
§ Mr. Orme:
Earnings related supplement is calculated on recent earnings on which the claimant has paid class one contributions. Since these contributions are collected along with income tax through the PAYE system, it is necessary to relate the calculations made to earnings in an income tax years. A gap of nine months between the end of the tax year and the beginning of the benefit year is needed to allow time for tax documents to be received from employers and for the Department to compile records of a contributor's reckonable earnings in the tax year. Liability for contributions in each tax year is limited by lower and upper earnings limits and these limits are increased annually in line with increases in the basic flat-rate retirement pension under the Social Security Pensions Act 1975.
I am aware of the criticisms which have been made of the method of calculating earnings-related supplement but it has so far not been possible to devise a satisfactory alternative.