3784495974

BANK I KREDYT styczeń 2008

Microeconomics

13

bars, maiuteuauce paymeuts front the absent partner are marked in light grey, basie child or family Itcnefits are marked in dark greeu, housing related benefits are marked in blue. and sociai assistance is represented as wbite bars. Tbe legend to each of tbe figures presents tbe details mebidmg tbe variou$ couutry-specific components of the disposable i neonie.

Au importaut point ueeds to be clarified concerniug tbe results for Polaud wbieh relates to tbe way we model Temporary Sociai Assistance (TSA). As mentioned in Sectiou 2.3 ouly a proportion of the TSA is guaranteed by the central budget and the rest of the paymeut a family is eligible for aeeording to tbe Sociai Assistance li „ sl tiou (which is 70% for single-person households and 80% for larger bousebolds) remains at the discretion of local authorities. Morę ofteu thau not tbese paymeuts are not received by fantilies. To accouut for this in the budget constraiuts drafted for Polaud we separale out the central (white bars) and the muuicipal (diuk grey bars) parts of tbe TSA in panels E of Figures 1 to 13. In panels F of the figures we preseut tbe budget lines which result front mcludmg ouly that part of the TSA which the fantilies cau be sura to receive, i.e. the centrally guaranteed element. This way of preseutiug the results. on the oue band, allows to see the degree of geuerosity of the TSA legislatiou, and on the otlier, shows the actual, guaranteed finaucial iiiceutives that the fantilies face in the labour market. It also makes the results morę cousisteut front the comparative point of view.

Auotlier point to notę in the case of the figures drawu for the UK are tlie Couucil Tax (CT) paymeuts, which are represented in panels A by the red bars. The CT values are tlien snbtnicted front the total family incomes for the purpose of drawing the budget lines in panels B.

5.1.    Budget constraiuts - overview

Ihere are several importaut generał oniclusions to be dra wu front the analysts of the budget constraiuts presented ni Figures 1 to 13. The graplts show the varyiug degree of geuerosity of each of the tliree tax and benefit Systems and the operation of the different elements.

5.1.1.    In-work support

Alt importaut element which differentiates the UK front the otlier two countries is the in-work support system, which in panels A is represented by the brown bars. The dtfference in the geuerosity of the Workiug Tax Credit between those willi and those without childreu is also quite elear, for exantple when we compare panels A in Figurę 1 with those in Figures 2 to 5. What is also rather striking is the relative high level of support for fantilies with childreu in the UK through the combiuation of the Child Benefit and the Child Tax Credit. It is iuteresting to notę that the CTC extends relatively high ttp the income distributiou. The fantilies are eligible to receive relatively high amounts of the CTC even in scenarios when one partner is workiug full-time and the otlier part tinie, <>1111 the familv-preiiiiiiiu part of the CTC is also received by the family in which botli partuers work full-time (see panel A of Figurę 13).¹⁴ What is also an importaut feature of the British system is the fact that eligibility for sociai assistance (111 the form of Incotne Support) euds at relatively Iow levels of income. This is the case botli for singles and for cottples, and is partly related to the inaximum workiug hours limit (15) but partly also to the relatively high ievels of paymeuts through the CTC.

5.1.2. Sociai Assistance and Housing Benefit

Eligibility for sociai assistance seems to end at Iow levels of income also in Polaud, but this is the case ouly for single-adult fantilies. Cottples in Polaud, and especially those with childreu, are eligible to receive the TSA eveu at relatively high levels of wagę iiiconie. This cau be seett 011 panel E of Figures 7, 8 and 9. In Figurę 7E we cau see that the family is eligible for Sociai Assistance

evelt when the mail 111 the couple Works fiill-tiiue (at

25^,“ perceutile earuings). In Germany eligibility for sociai assistance (A1.G1I) extends relativeły high ttp the earning scalę for botli singles and cottples, but part of the explanation for that is the fact that the ALGII also iuchides the housing benefit. Thus, for example, if we compare the budget constraiuts of two fantilies - one which is eligible to receive the Housing Benefit and the otlier which is not (see Figures 7D and 8D) we cau see that the AI-GII ends relatively early - at about half-time earuings of the ntau in the couple. In Polaud the nieatis-test for the TSA also iuclndes the Housing Benefit, aud so when the fantily is not eligible for the HB the eligibility for the TSA exteuds further (compare Figures 7E and 8E). Snclt high level of TSA eligibility for cottples in Polaud clearly stands out in our aualysis.

The eligibility ntles concerniug the Housing Benefit in Polaud are also related to the earlier point. Neither in the UK, nor in Germany the eligibility to the benefits related to housing expenses exteuds as high ttp the relative earuings distributiou as 111 Polaud. As we cali see on the figures, the Polish HB ntles imply that a single woman working full-time at 25**' perceutile female earuings wottld still be eligible to claint the HB regardless of whether she does or does not have childreu. The sanie applies to all one-earner cottples in which the ntau works at the 25¹¹' perceutile małe wagę. O11 Figures 10, 12 aud 13 we cau see that the eligibility does not end even if the secottd partner begins to work part-time. If the eaniitigs of the man are Iow (Figurę 12) aud we consider a couple with two childreu, the