Welcome fall in dependency on the state

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Official data released today by the Office of National Statistics shows that 52% of households are receiving more in benefits than they pay in taxes.

This figure has fallen 1.5 percentage points since 2011 – although it is still 8.2 percentage points higher than in 2000.

For non-retired households the proportion has fallen 1.8 percentage points – from 39.7% in 2011 to 37.9% in 2013.

Credit: Office for National Statistics 

This measure has been newly introduced by the ONS for the latest release, and the Centre for Policy Studies welcomes its inclusion – the measure having been first commissioned by the CPS in its 2012 paper The Progressivity of UK Taxes and Transfers.

Responding to the ONS release CPS Director Tim Knox stated:

“This small fall in the proportion of households who receive more in benefits than they pay in tax is welcome. But the fact that over half of all households receive more in benefits than they pay in taxes should be deeply shocking. There is still so much more to do to get us back to the long term average of around 45%.”

The data show that:

  • Total cash benefits plus benefits in kind for the middle 20% of households fell by 5% between 2011 and 2013.
  • Total taxes paid by the middle 20% rose 1% between 2011 and 2013.
  • The net dependency of the middle 20% fell 17% over the two year period.
  • Apart from the top fifth, all income groups are paying less in direct taxes than they were in 2011.
  • Pre-tax income for the bottom three fifths of households has risen since 2011.

The richest 20% paid £1,396 more per household in taxes in 2013 than in 2011.

News Source : Welcome fall in dependency on the state
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