§ Mr. Newton
The Department's estimates of numbers in the poverty trap in 1979 are now available and these, together with the estimates for 1977, are shown in the attached three tables. They cover families and single people, under pension age and in full-time work, who in theory were facing marginal "tax" rates of 50 per cent. or more because they were receiving means-tested benefits while paying income tax and/or social security contributions.27W
The declining value and final abolition of child tax allowances in April 1979 lowered tax thresholds for working families with children. This, combined with the receipt of a means-tested benefit, would tend to work in the opposite direction to the changes mentioned in (a), (b) and (c) above, but the overall effect on numbers in the poverty trap is likely to have been negligible.