The Budget announces a package of
alignment measures, which will streamline rules on benefit payment periods, the
backdating period for Disability Living Allowance and
Attendance Allowance forms (the time available for claimants to complete
DLA/AA forms will be reduced from 6 to 2 weeks), the treatment of rental
income and termination payments.
For elderly people with either no works pension or small works pensions, the government will raise the pension credit guarantee from £114 a week this year, to £119, then £124, increasing to £130 a week in 2009-10.
Remove the starting rate and cut the basic rate of income tax from 22 pence to 20 pence in April 2008, creating a simpler structure of two rates: a 20 pence basic rate and a 40 pence higher rate.
Align the income tax with the national insurance system, with its ceiling set at the same single threshold - £43,000 - thereby creating a tax system for income that has just two rates and two thresholds.
For those under 75, the tax free allowance will rise in three stages from £7,280 now to £8,990 in 2008, to £9,500 in 2010 and £9,770 in 2011, almost twice as much as in 1997. For those over 75, the tax free allowance will rise annually from £7,420 to by 2011 £10,000. Couples under 75 will have a tax free married allowance up to £19,540; for a couple over 75 up to £20,000.
From April 2007, HM Revenue & Customs will introduce a four-week run-on in entitlement to
working tax credit from the day a claimant ceases to work over 16 hours. This will reduce the number and value of overpayments.
From April 2008 the income threshold below which working tax credit is received in full will increase by £1,200, to £6,420 per annum. This will be introduced alongside a wider package of reforms to the personal tax and tax credit system.
Increase the child element of the child tax credit by £150 a year above earnings indexation in April 2008, raising the child element to £2,080 a year.
Raising the withdrawal rate on tax credits by 2 per cent to 39 per cent from April 2008.
Establish local employment partnerships with large retail employers (including Tesco, Sainsbury's, Asda, B&Q, Marks & Spencer, and the British Retail Consortium) working in partnership with Jobcentre Plus at a local level, to help the longterm unemployed and economically inactive back to work.
Continue to make in-work credit available to eligible lone parents, for their first twelve months in work, in the current pilot areas until June 2008, benefiting over 250,000 lone parents. A higher rate of £60 a week will apply across the whole of London.
Raise the adult rate of the National Minimum Wage to £5.52 per hour, the youth rate, for workers aged between 18 to 21, to £4.60 and the development rate, for 16 and 17- year olds to £3.40; all from October 2007.
Extended and free child care for up to 50,000 workless parents undertaking training.
New funds set aside so that 50,000 16 to 17 year olds who sign activity and learning agreements will receive a training wage in return for gaining skills.
From now until 2011, will offer £2,000 (in some cases £3,000) training help per employee
for small companies who take on an employee needing to acquire the most basic of skills.
Paul Treloar, Disability Alliance's Director of Policy and External Services, criticised the Chancellor’s budget for failing to address this country's ‘ungenerous’ welfare benefits system in a letter published in
"The Guardian" on Friday March 23, 2007. You can view the letter in the link below.
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