Introduce a Weekly National Allowance
A weekly cash payment of £48 a week could lift 200,000 families out of poverty.
If the Government abolished the personal allowance of income tax and replaced it with a weekly cash payment of £48 a week it could lift 200,000 families out of poverty. Overall, the swap would shift £8bn currently spent on tax allowances for the 35% highest income families to the remaining 65% of families.
Instead of raising the personal tax allowance threshold to £12,500, the money should be used to fund the Weekly National Allowance, made up of a new weekly payment worth £2,500 per year and paid to everyone outside of the richest 1%, and a restoration of child benefit to its 2010/11 real terms value.
The proposal is cost neutral. But the poorest 10% of households on average would see an increase in disposable income of £1,160 per year or around £20 per week, equal to a 15.8% increase. On average, every major family type among the poorest 25% of households would see their income rise – whether a single or couple adult family, with or without children, in or out of work, or above or below the pension age.
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