Mother with child

How will tax and welfare reforms affect different groups?

Select from the options below to explore how tax and welfare reforms since 2010 will affect different groups by 2021/22.

Explanations of the terms and definitions used are at the bottom of this page.

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What do the terms mean?

The figures for disabled adults are based on the Family Resources Survey (FRS) definition of a ‘core’ group of disabled people, which is that a person is considered to have a disability if they have a long-standing illness, disability or impairment which causes substantial difficulty with day-to-day activities.

Households in the Family Resources Survey (FRS) and Living Costs and Food Survey (LCF) datasets are ranked from poorest to richest in terms of disposable income (adjusting for family size). The data are then divided into 10 equally sized groups or ‘deciles’, with the poorest 10% of families in decile 1, the next 10% in decile 2, and so on to the richest 10% in decile 10.

We model reforms to the following parts of the tax and welfare systems:

  • income tax
  • National Insurance Contributions (NICs)
  • indirect taxes (VAT and excise duties)
  • means-tested and non-means-tested social security benefits
  • tax credits
  • universal credit (UC)
  • national minimum wage and national living wage (not formally part of the tax-benefit system, but included in our research)

Gross incomes are earnings, income from self-employment, investment income, private pension incomes, and incomes from other non-state sources such as property income.

The Multiple Benefit Unit (MBU) classifications refer to households where more than one ‘benefit unit’ lives at a single address. A benefit unit is defined by the Department for Work and Pensions (DWP) as a single adult or an adult couple. Examples of MBUs would be:

  • more than one single adult sharing an address
  • a single adult or lone parent living with his or her parents
  • an adult couple living with their parents

The Family Resources Survey (FRS) and Living Costs and Food Survey (LCF) datasets put survey respondents into the following five categories:

  • White (including England, Welsh, Scottish, Northern Irish, British, Irish, Gypsy or Irish Traveller, and any other White background)
  • Mixed or Multiple ethnic groups (including White and Black Caribbean, White and Black African, White and Asian and any other Mixed or Multiple ethnic background)
  • Asian (including Indian, Pakistani, Bangladeshi, Chinese and any other Asian background)
  • Black (including Black British, African, Caribbean and any other Black, African, or Caribbean background)
  • other (including Arab, and any other ethnic group not specified in the other categories)
  • 'Differing' means households with one or more adults, where the adults are of different ethnicities

Last updated: 18 Apr 2018