Family Income Supplement was a

means-tested benefit A means test is a determination of whether an individual or family is eligible for government assistance or welfare, based upon whether the individual or family possesses the means to do without that help. Canada In Canada, means tests are use ...

for working people with children introduced in Britain in 1970 by the Conservative government of

Edward Heath Sir Edward Richard George Heath (9 July 191617 July 2005), often known as Ted Heath, was a British politician who served as Prime Minister of the United Kingdom from 1970 to 1974 and Leader of the Conservative Party from 1965 to 1975. Heath a ...

, effective from August 1971. It was not intended to be a permanent feature of the

social security Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specifical ...

system and was abolished by the Social Security Act 1986, which replaced it with

Family Credit Family Credit was a social security benefit introduced by the Social Security Act 1986 for low-paid workers with children in Great Britain that replaced Family Income Supplement. The benefit was designed for families with children if at least on ...

. Half of the amount by which the claimant's income fell below £15/week was paid, plus £2 for each additional child, to a maximum of £3/week (revised to £4/week). In addition, those in receipt were given entitlement to

free school meals A school meal or school lunch (also known as hot lunch, a school dinner, or school breakfast) is a meal provided to students and sometimes teachers at a school, typically in the middle or beginning of the school day. Countries around the world ...

and passported to the NHS Low Income Scheme. Claimants were required to provide payslips to prove that they were in remunerative full-time work for a minimum of 30 hours per week, or 24 hours for single parents. In 1985, differential rates for children under 11, from 11 to 15 and over 16 were introduced. There was a maximum payment to prevent abuse from claimants or employers deliberately reducing or understating earnings. Once entitlement was established, it continued for 52 weeks regardless of changes in circumstances. Entitlement was calculated with respect to gross income, which exacerbated the

poverty trap In economics, a cycle of poverty or poverty trap is caused by self-reinforcing mechanisms that cause poverty, once it exists, to persist unless there is outside intervention. It can persist across generations, and when applied to developing count ...

. Each extra £1 a week in gross earnings would reduce weekly Family Income Supplement by 50p, on top of which most claimants would be subject to

income tax An income tax is a tax imposed on individuals or entities (taxpayers) in respect of the income or profits earned by them (commonly called taxable income). Income tax generally is computed as the product of a tax rate times the taxable income. Tax ...

and

National Insurance Contributions National Insurance (NI) is a fundamental component of the welfare state in the United Kingdom. It acts as a form of social security, since payment of NI contributions establishes entitlement to certain state benefits for workers and their famil ...

of at least 30p, which produced a very high marginal withdrawal rate. Additionally, the loss of entitlement took with it entitlement to health and education benefits. The take-up of the benefit was initially poor, with less than half of those eligible claiming.Documents on Health and Social Services: 1834 to the Present Day - Brian Watkin

References

{{reflist Child welfare in the United Kingdom Government-provided school meals in the United Kingdom Social security in the United Kingdom

See also

References