One of the work incentive measures that has been emphasised in the Bill is the increase in the amount of earnings that can be kept before any deduction is applied. As can be seen in the table below that is set at £109.62 a week for a couple with one child. Generous indeed!

BUT… this amount is reduced by one and a half times the rent or mortgage interest that they pay down to a minimum disregard or ‘floor’ level of, in this case £20 a week. Not so generous.

As can be seen in the table below, that means that if their rent is more than £59.74 a week they’ll be on the floor level of disregard. It doesn’t seem likely that many working families will have housing costs at a level where they will get much, if any, of the higher disregard. The most likely beneficiaries will be older workers who’ve finished paying off their mortgage. Need less – get more?

.                         Maximum            Floor            Housing cost at which floor disregard applies
Couple              £57.69                 £10.00          £31.79
+1 child            £109.62               £20.00         £59.74
+2 children      £109.62               £25.00         £56.41
+3 Children      £109.62              £30.00         £53.08

Lone Parent
+1 child             £148.08              £40.00          £72.05
+2 children       £148.08              £45.00          £68.72
+3 Children       £148.08             £50.00          £65.38