[MaxGhenis]

Summary

PolicyEngine UK made two errors in the legacy means tests: Income Support, Housing Benefit, Pension Credit and council tax reduction.

• It counted property_income, which is rent from property other than the home, as income.
• It deducted all of a person's income tax, including the tax on rent, interest and dividends.

The regulations treat income derived from capital as capital, not income. The capital counts instead, through the capital limits and tariff or deemed income. Tax is disregarded only on income that is taken into account. Rent for letting part of the claimant's own home is the exception: it stays income, less £20 a week per occupier.

This PR makes six changes:

• Removes property_income from IS, HB (working age and pension age), Pension Credit and council tax reduction income.
• Counts land and property in council tax reduction capital, and adds CTR tariff income. IS, HB and Pension Credit already count land and property. CTR counted household savings only, so it needs the property once the rent stops counting.
  • Capital now covers savings, land, and residential and non-residential property other than the home (gov.local_authorities.council_tax_reduction.capital.sources). Land and property are valued at 90% of market value for the expenses of sale (capital.sale_expenses), then less any debt secured on that property (main's asset-specific inputs).
  • For a working-age applicant with an award of Universal Credit, capital is the UC assessment, as the schemes require. Scotland from April 2022 is the exception: its authority calculates capital itself. New council_tax_reduction_universal_credit_award defines the award: a payment, or a claim entitled before the benefit cap and deductions, which reduce an award rather than end it.
  • The whole capital of an applicant on Income Support, income-based JSA or income-related ESA is disregarded where the scheme says so: Wales, Scotland before April 2022, Kingston, Merton, Westminster and Oxford. Newham's scheme omits the disregard.
  • New council_tax_reduction_tariff_income adds the income the national schemes (England for pensioners, Wales, Scotland) treat capital as yielding. Before, they had none. This is the tariff part of Pensioner council tax reduction: applicable amount (post-April-2021 allowance, children, severe disability premium) and income (Child Benefit, tariff income) #1933.
• Adds legacy_benefits_home_letting_income (BenUnit). It is the claimant's and partner's sublet_income less the sub-tenant disregard, assuming one occupier. The disregard is £20 a week; working-age claimants had £4 before April 2008, as did everyone before Pension Credit in October 2003. It goes into IS, HB, Pension Credit and council tax reduction. In council tax reduction it is left out where a working-age applicant's income is the Secretary of State's UC assessment, and in Scotland's scheme for people under pension age from 1 April 2022.
• Adds legacy_means_test_income_tax (Person), deducted in place of income_tax in all four tests. It is the tax on the income these tests count: the Step 4 tax on earnings, pensions and taxable benefits (ITA 2007 s.23), less its share of the Step 6 reductions. The residential finance-cost reduction comes off the tax on rent; the other reductions are shared pro rata. Step 7 charges are not deducted.
• Selects the Scottish working-age CTR scheme as everyone outside the pension-age scheme (~council_tax_reduction_pensioner, from Apply the benefit cap to mixed-age couples on Universal Credit, and keep them off pensioner Council Tax Reduction #1944). A UC award held only by people over pensionable age no longer selects it.

Universal Credit is unchanged: its own fix is #1950. Tax credits already count investment and property income, and that is correct (see "Tax credits").

Worked case (2026), from SPC Regs Sch IV para 18: a single pensioner aged 80 with a State Pension of £10,000 and £4,000 of rent from a let flat.

• On main, Pension Credit counts the rent less its tax (£86 with the £1,000 property allowance), giving income of £13,914 and no guarantee credit.
• On this branch, income is £10,000, so guarantee credit is (238 − 10,000/52) × 52 = £2,376. This takes the flat's value as capital of £10,000 or less, supplied separately; above £10,000 it yields deemed income of £1 a week per £500 (reg 15(6)).

Law

All texts were read today from legislation.gov.uk (/data.xml). Verbatim copies, the fetch script and a paragraph locator are kept with the review notes.

Working age. IS Regs 1987 reg 48(4) (https://www.legislation.gov.uk/uksi/1987/1967/regulation/48):

Except any income derived from capital disregarded under paragraph 1, 2, 4, 6, 12 , 25 to 28, 44 or 45 of Schedule 10, any income derived from capital shall be treated as capital but only from the date it is normally due to be credited to the claimant's account.

IS Sch 9 para 22(1) (https://www.legislation.gov.uk/uksi/1987/1967/schedule/9) disregards as income:

Any income derived from capital to which the claimant is or is treated under regulation 52 (capital jointly held) as beneficially entitled but, subject to sub-paragraph (2), not income derived from capital disregarded under paragraph 1, 2, 4, 6 12 or 25 to 28 of Schedule 10.

The same rule appears in:

• HB Regs 2006 reg 46(4) and Sch 5 para 17;
• JSA Regs 1996 reg 110(4) and Sch 7 para 23;
• ESA Regs 2008 reg 112(4) and Sch 8 para 23.

The exceptions are income from capital that is itself disregarded. That covers the home, premises being acquired, sold or repaired, premises occupied by an old or incapacitated relative, business assets and personal-injury trusts. For some of these premises the income counts only net of mortgage repayments, council tax and water charges (para 22(2)). DMG 28196: "treat as capital any other income received from premises apart from income from the home".

Pension age. HB (SPC) Regs 2006 Sch 5 para 22 (https://www.legislation.gov.uk/uksi/2006/214/schedule/5) and SPC Regs 2002 Sch IV para 18 (https://www.legislation.gov.uk/uksi/2002/1792/schedule/IV) both read:

Except in the case of income from capital specified in Part 2 of Schedule 6, any actual income from capital.

(In the SPC version the exception is "Part II of Schedule V".) The capital yields deemed income instead (reg 29(2); reg 15(6)). DMG 85007: where deemed income applies, "any actual income generated from the capital is fully disregarded". Its example is rent from a let share of a second property.

The Part 2 / Part II exceptions keep some actual income counted: life interests and life rents, rent where the claimant has no reversionary interest, annuities, and property held on certain trusts for the claimant (SPC Sch V paras 24-28). HB (SPC) and the pensioner CTR schemes also disregard actual Part 2 income where that capital totals £10,000 or less. The data cannot identify any of these.

Rent for part of the home.

• Working age (IS Sch 9 para 19; HB Sch 5 para 22; JSA Sch 7 para 20; ESA Sch 8 para 20). The home is disregarded capital, so reg 48(4) does not convert the rent, and the disregard is:

  (a) where the aggregate of any payments made in respect of any one week in respect of the occupation of the dwelling by that person or a member of his family, or by that person and a member of his family, is less than £20, the whole of that amount; or (b) where the aggregate of any such payments is £20 or more per week, £20.

  SI 2007/2618 regs 5(12) and 11(12) substituted £20 from April 2008. Before then it was £4, plus a further amount where the payment included heating, which is not modelled.

• Pension age: SPC reg 15(5)(i) and HB (SPC) reg 29(1)(v) list "any payment of rent made to a claimant who ... occupies part of the property", and Sch IV para 9 / Sch 5 para 10 disregard £20. That has applied since the 2002 Regulations as made.

• Board and lodging has its own disregard: £20 plus half the excess (IS Sch 9 para 20; HB Sch 5 para 42; SPC Sch IV para 8).

Tax. IS Sch 9 para 1 and HB Sch 5 para 1:

Any amount paid by way of tax on income which is taken into account under regulation 40 (calculation of income other than earnings).

HB (SPC) reg 33(12) and SPC reg 17(10)(a): "In the case of any income taken into account for the purpose of calculating a person's income, there shall be disregarded any amount payable by way of tax." Tax on income the tests do not take into account is therefore not deducted.

Income Tax Act 2007 s.23 builds liability in steps (https://www.legislation.gov.uk/ukpga/2007/3/section/23):

• Step 4 calculates tax on each component of income.
• Step 6 deducts tax reductions such as the married couple's allowance and the reliefs in other_tax_credits.
• Step 7 adds charges, such as the High Income Child Benefit Charge and the pension annual allowance charge (s.30).

legacy_means_test_income_tax is therefore the Step 4 tax on counted income (earned_income_tax: earnings, pensions and taxable benefits), less its share of the Step 6 reductions. Step 7 charges are not tax calculated on counted income, so they are not deducted.

Most reductions are not tied to any income: s.27 orders them only to give the greatest reduction in liability. Two are tied:

• Residential finance costs. The reduction is given on at most the property business's profits, plus any current-year estate amounts and within the adjusted total income limit (ITTOIA 2005 ss.274A and 274AA). Main models it separately (property_finance_cost_relief), so the helper takes it off the tax on rent first.
• Foreign tax credit. It reduces the tax on the income the foreign tax was paid on (TIOPA 2010 ss.18(2) and 36). It sits inside other_tax_credits with venture capital trust, enterprise investment, maintenance and other reductions, and the input records no source.

The model shares those remaining reductions in proportion to the Step 4 tax left on each kind of income, as a stated convention. A credit for foreign tax on rent is therefore partly attributed to counted income, and the tax deducted is too low. Splitting the input by source would fix that.

If income_tax is supplied and differs from the tax its components imply, the difference falls on the tax on counted income.

Pension Credit with earnings (after #2019). #2019 measures the tax on earnings as the extra tax the earnings cause, including what they add on savings and dividends (Max's ruling on #2019, option (a)). Self-employed profit carries notional tax instead of the actual tax. This PR keeps that formula. It subtracts pension_credit_uncounted_income_tax_without_earnings: the tax on uncounted income, and the Step 7 charges, that the claimant and partner would pay without earnings. That is income_tax less legacy_means_test_income_tax, on #2019's no-earnings counterfactual.

• No capital income or charges: it is nil, so Apply the Pension Credit earnings disregards (SPC Regs 2002 Sch VI) #2019's results stand.
• No earnings: it reduces to the rule above.
• Earnings: it does not depend on them, so Apply the Pension Credit earnings disregards (SPC Regs 2002 Sch VI) #2019's invariance (Pension Credit income does not move with earnings inside the disregard) still holds.

Subtracting #2019's self-employment tax from legacy_means_test_income_tax directly would remove the induced dividend tax twice. Main's savings-band pair now gives 12,000 rather than 10,914: the £1,086 of tax on interest due without earnings is not deducted.

The model's income_tax itself nets Step 6 reductions against Step 7 charges (max(0, additions − subtractions)), where ITA 2007 s.29(2) allows reductions only against Step 5 tax. That inherited HMRC aggregation is fixed in #2545. The helper's floor gives the same answer with either total.

Council tax reduction.

Scheme	Income from capital	Part of the home	Tax
England, pensioners (SI 2012/2885)	Sch 5 para 23 disregards actual income from capital	Sch 1 para 16(1)(v), Sch 5 para 10 (£20)	Sch 1 para 17(13)
England, default scheme (SI 2012/2886)	para 64(5) treats it as capital; Sch 8 para 22	Sch 8 para 26 (£20)	Sch 8 para 4
Wales (WSI 2013/3029), pensioners and working age	Sch 4 para 23; Sch 6 para 27(5) and Sch 9 para 22	Sch 4 para 10; Sch 9 para 26	Sch 1 para 11(13); Sch 9 para 4
Scotland, pension age (SSI 2012/319)	Sch 3 para 22	reg 27(1)(v), Sch 3 para 9	reg 31(12)
Scotland, working age (SSI 2021/249, from 1 April 2022)	reg 57(1) is a closed list with only the assumed yield (reg 63); reg 63(3) treats actual income as capital	no head in reg 57(1), so not counted	tax on earnings only (regs 49, 51)
Scotland, working age before April 2022 (SSI 2012/303)	treated as capital	Sch 4 para 25 (£20)

Where a working-age applicant has an award of Universal Credit, the schemes take the applicant's income from the Secretary of State's UC assessment instead:

• the default scheme para 37(1);
• WSI 2013/3029 Sch 6 para 9(1) and (3);
• SSI 2012/303 reg 26(1).

That assessment has no head for rent from part of the home (UC Regs 2013 reg 66), and Oxford's Appendix 3 disregards it. So council_tax_reduction_applicable_income leaves the home-letting income out there.

Selecting the Scottish scheme follows SSI 2021/249 reg 3. It covers everyone outside the pension-age scheme: applicants under pensionable age, and those over it where the applicant or partner has a qualifying income-related benefit or an award of UC. council_tax_reduction_pensioner counts a UC award only where a claimant or partner is under the qualifying age, as UC itself requires (UC Regs 2013 reg 3(2)(a)). So a joint award held only by people over pensionable age does not select the scheme (reg 3(2)). The model has no inputs for:

• reg 3(2)'s other statuses: an award continuing pending supersession, or an award the person was not entitled to;
• a UC claim awaiting determination (reg 3(1)(b)(ii), from April 2023);
• reg 3(3).

That scheme deducts only tax on earnings, while the shared tax variable deducts tax on all counted income, pensions included. This PR's change for it is only that tax on rent, interest and dividends is no longer deducted. The scheme's own earnings rules are for #1966.

CTR capital and tariff income. Every scheme counts the whole of the applicant's capital unless a schedule disregards it, and above £16,000 there is no reduction (SI 2012/2885 Sch 1 para 31(1) and reg 11(2); WSI 2013/3029 reg 30). The model's CTR capital was household savings only. It now also counts land and property other than the home, valued less 10% for the expenses of sale. The citations are SI 2012/2885 Sch 1 para 32(a), the default scheme para 65, WSI 2013/3029 Sch 1 para 26 and Sch 6 para 28, SSI 2012/319 reg 42, SSI 2012/303 reg 46 and SSI 2021/249 reg 70.

• Secured debt. Debt secured on other residential or non-residential property (main's inputs; nil in the survey) comes off that property after the sale expenses, floored at nil per asset (para 32(b) and equivalents; DMG 29624). Land has no debt input.

• Shares stay out until pension wealth can be separated from corporate_wealth (Pensioners without Pension Credit are tested on household savings only for the council tax reduction capital limit #1936).

• Universal Credit. For a working-age applicant with an award of UC (council_tax_reduction_universal_credit_award), capital is the Secretary of State's UC assessment: default scheme para 37(6); WSI 2013/3029 Sch 6 para 9(6); SSI 2012/303 reg 26. The award includes one the benefit cap or deductions reduce to nil, since the cap reduces the award rather than ending it (UC Regs reg 81). From 1 April 2025, SSI 2021/249 reg 10A adds an award reduced to zero by a sanction and one treated as reclaimed after a nil award due to earnings. Neither is modelled. The exception is Scotland from 1 April 2022, where SSI 2021/249 regs 66-70 have the authority calculate it. A UC input for a couple who are both over pensionable age does not bring in these rules.

• The passport. The whole capital of an applicant on IS, income-based JSA or income-related ESA is disregarded:

  Scheme	Disregarded
  Wales	yes (Sch 10 para 8)
  Scotland before 1 April 2022	yes (SSI 2012/303 Sch 5 para 7)
  Scotland from 1 April 2022	no: SSI 2021/249 has no such disregard, reg 13(11) deems only the income conditions met, and reg 13(1) keeps the limit
  Kingston, Merton	yes (their 2026-27 Schedule 10 para 8)
  Westminster	yes, inferred from its statement that it mirrors the default scheme
  Newham	no: its Schedule 10 paras 8 and 9 are blank
  Oxford	yes (Appendix 6, which also ignores capital already taken into account for UC, before its paragraph 28 limit)

The national schemes treat capital as yielding a weekly tariff income, counting capital up to the limit:

Who	Tariff
Pensioners: England (SI 2012/2885 Sch 1 para 37), Wales (WSI 2013/3029 Sch 1 para 31), Scotland (SSI 2012/319 reg 27(2))	£1 for each £500, or part, over £10,000
Under pension age: Wales (Sch 6 para 33), Scotland (SSI 2012/303 reg 51; from April 2022 SSI 2021/249 reg 63(1)(b))	£1 for each £250, or part, over £6,000
Under pension age with UC: Wales and Scotland to March 2022 through the Secretary of State's income (Sch 6 para 9; SSI 2012/303 reg 26), Scotland from April 2022 by reg 63(1)(a)	£4.35 a month for each £250, or part, over £6,000 (UC Regs 2013 reg 72)

The tariff is nil:

• on the Pension Credit routes, whose income already includes the deemed income or is wholly disregarded;
• for people on IS, income-based JSA or income-related ESA. Wales (Sch 10 para 8) and Scotland before April 2022 (SSI 2012/303 Sch 5 para 7) disregard their whole capital, and from April 2022 their income is not assessed (SSI 2021/249 reg 13(11)).

English schemes for people under pension age are local. Kingston, Westminster and Oxford set their own tariff; Merton and Newham have none in the model (inherited).

The five English local schemes the model runs (Merton, Newham, Westminster, Kingston upon Thames and Oxford) were checked against their published 2025-26 and 2026-27 scheme texts. Each treats income derived from capital as capital for applicants not on UC and disregards £20 of sub-tenant rent. Westminster's full scheme text was not found, so for Westminster this is inferred from its stated mirroring of the default scheme. Oxford's formula uses the generic CTR income for UC recipients, which is inherited; the home-letting income is now left out of it on the UC route.

Northern Ireland has the same words: HB (NI) Regs 2006 reg 43(4) and Sch 6 paras 18 and 23; SPC Regs (NI) 2003 Sch 4 paras 9 and 18.

Tax credits

Tax Credits (Definition and Calculation of Income) Regs 2002 reg 3, Step One, adds "the investment income (as defined in regulation 10)" and "the property income (as defined in regulation 11)":

• reg 10(1) covers gross interest and dividends;
• reg 11(1) covers "the annual taxable profits arising from a business carried on for the exploitation, as a source of rents or other receipts, of any estate, interest or rights in or over land in the United Kingdom".

So tax_credits_applicable_income is right to count all three, and it is unchanged. Two small gaps remain, both in years before tax credits ended in April 2025:

• reg 10(2)(a) Table 4 disregards ISA interest and dividends, which savings_interest_income includes;
• reg 11(2) disregards rent-a-room profits.

What still counts

Route	Law	Model
The capital itself	tariff / deemed income and capital limits (IS reg 53, HB reg 52, HB (SPC) reg 29(2), SPC reg 15(6), the CTR schemes)	Let property counts as capital in IS, HB and Pension Credit, and now in CTR too, with the national CTR schemes' tariff income.
Rent from part of the home	as above	legacy_benefits_home_letting_income
Board and lodging	£20 + 50% of the excess	not modelled: there is no input. The householder-side boarder and lodger work stacks on this PR and extends the same variable.
Rent from premises whose value is disregarded (for sale, a relative's home, repairs)	counts, net of mortgage, council tax and water	not identifiable in the data. The model counts those premises' value as capital, consistently with treating their rent as capital.
Pension-age Part 2 capital (life interest, rent with no reversionary interest, annuity, some trusts)	income counts	not identifiable
Lettings that are a trade (B&B)	self-employed earnings	already in self_employment_income

Data caveat and release gate. Owner-occupiers' rent from letting part of their home (FRS SUBRENT) sits in uk-data's property_income, not sublet_income. It stays there until PolicyEngine/policyengine-uk-data#508 moves it. Until then this PR drops it from these means tests instead of counting it less £20.

This PR prepares the channel; on its own it does not correct production assessments for that rent. The gate, recorded on #508:

1. this PR and Model rent from boarders, lodgers and sub-tenants for the householder #2002 are released;
2. the data move ships in the batched data release with an aggregate conservation check (the total leaving property_income equals the new sublet_income);
3. the lock is bumped.

In the raw FRS 2024-25, 33 owner households report SUBRENT, a weighted £0.41bn a year. Fewer than ten of them are in households reporting Pension Credit, Income Support, Housing Benefit, JSA, ESA or council tax reduction, using uk-data's own benefit codes.

Invariants (stated and tested)

policyengine_uk/tests/test_legacy_means_test_income_from_capital_properties.py (Hypothesis) checks these over populations of up to four families. The families are single, couple and lone-parent, pension and working age, in five regions including Scotland, Wales and Northern Ireland, in 2025 and 2026:

1. Invariance. Scaling property, savings interest and dividend income (×0, ×3) changes none of the four means-test incomes, and none of IS, HB, Pension Credit or council tax reduction.
   • UC and tax credits are held fixed, and incomes stay inside the basic rate band.
   • Marriage Allowance is held at nil. Whether a spouse can transfer it depends on their income, including income from capital, which is a legitimate way for income from capital to change the tax on counted income.
   • On main this fails. For example, a pensioner's rent counts in Pension Credit income less its tax.
   • Intended exception, after Apply the Pension Credit earnings disregards (SPC Regs 2002 Sch VI) #2019. Pension Credit's tax on earnings is the extra tax the earnings cause, including on savings and dividends (d1424). So with earnings, income from capital can move it. Hypothesis found the case: a couple's wages of 6,707, under the personal allowance, leave dividends taxable, and at three times the dividends 279.77 of tax is induced and deducted.
     • Pension Credit income is invariant wherever pension_credit_employment_income_tax does not move.
     • Elsewhere it changes by exactly minus the change in that tax and in the earnings disregard.
     • The awards that follow Pension Credit are compared wherever that tax is steady.
2. Bounds. 0 ≤ counted home-letting income ≤ the rent, and it equals max(0, rent/52 − disregard) × 52, with a £4 working-age disregard before April 2008.
3. Monotone. More rent from part of the home never lowers a means-test income, and never raises IS, HB, Pension Credit or council tax reduction, over the generated families. Two route changes can break this in law-consistent data, and are not covered:
   • A Pension Credit savings-credit exit with property. Until Value means-tested capital less 10% sale expenses and secured debt (UC reg 49 and legacy equivalents) #1969 values Pension Credit capital less sale expenses (SPC reg 19), the savings-credit-only route sees property gross and the general CTR route net. Value means-tested capital less 10% sale expenses and secured debt (UC reg 49 and legacy equivalents) #1969 lands first; this PR then adds the reviewers' two witnesses as cases.
   • Capital recorded only in pension_credit_reported_capital. It leaves the CTR assessment when the savings credit ends, because the general route uses the household capital. That is a data-support limit, not a rule: reusing a former Pension Credit determination would be wrong.
4. Tax bounds. 0 ≤ legacy_means_test_income_tax ≤ min(income_tax, earned_income_tax), with equality to income_tax when there is no savings, dividend or property income and no Step 7 charge.
5. Tariff. 0 ≤ council_tax_reduction_tariff_income ≤ £2,088, the yield at the £16,000 limit (40 steps of £250 at £4.35 a month). It is nil in Northern Ireland and for English people under pension age, whose local schemes set their own. It never falls when savings rise while the family stays on the same route: pensioner, UC award, passport, guarantee credit, savings credit only.

Two of main's property tests now hold or subtract the taxes these tests deduct:

• test_means_tests_see_the_loss_only_through_tax (trading losses) holds legacy_means_test_income_tax and pension_credit_uncounted_income_tax_without_earnings alongside income_tax. Both are recomputed from the tax components, so a loss that moves interest between bands moved Housing Benefit income with income_tax held: by 1,047 in the failing family.
• Apply the Pension Credit earnings disregards (SPC Regs 2002 Sch VI) #2019's earnings-disregard property subtracts the uncounted tax from its own no-earnings simulation (see Tests).

#1909's CTR property tests now use the new income and capital definitions as their reference, recomputed from the regulations rather than read from the variables under test:

• tariff income;
• sale expenses;
• the UC capital route, by award status;
• the Welsh passported disregard;
• no home-letting income on the UC route.

The runs below add a differential check. In 2026 the rent step lowers each means-test income by exactly the unit's rent less its tax, wherever neither run is at a floor, to float32 rounding. The rent and tax are summed over the members each test counts. UC and tax credits are identical in every year.

Tests

• New gov/dwp/legacy_means_tests/income_from_capital.yaml: 58 cases computed by hand, with the arithmetic in each case. Where a case supplies an amount (an applicable amount, an award, a tax component) to isolate one rule, its comment says so: that figure is a model-contract expectation, not a complete statutory award.

  • IS: a lone parent with rent (8,960).
  • HB:
    • working age with rent, interest and dividends (13,339.60);
    • a working-age award with rent from a let property (2,780.29, against nil if the rent counted);
    • pension age with sub-tenant rent (17,874).
  • Pension Credit: with rent (guarantee credit 2,376) and with dividends (savings credit 668.22).
  • CTR income: England pensioner (13,560), Scottish working-age (12,000), Welsh working-age (13,560).
  • CTR capital:
    • a let property worth more than £16,000 ends CTR for an English pensioner (valued at £90,000) and a Welsh working-age applicant (£45,000);
    • an English pensioner's £17,000 property is valued at £15,300, so CTR is £1,618;
    • secured debt: £20,000 less 10% less £4,000 is £14,000, with tariff £416;
    • negative equity on one property doesn't reduce £12,000 of savings.
  • The passport: an IS recipient with £20,000 of property:
    • Wales 2026, Scotland 2021, Kingston, Merton and Westminster: CTR £2,000;
    • Scotland 2026: capital £18,000, CTR nil;
    • Newham: CTR nil.
  • CTR tariff income:
    • Welsh and Scottish working-age with property below the limit (tariff £624, CTR £775.20);
    • Welsh and Scottish pensioners (£312);
    • a Welsh IS recipient (nil);
    • part-steps of £250 at the weekly and UC rates (52, 52, 104 and 52.20, 52.20, 104.40).
  • The savings-credit exit: £200 more sub-tenant rent ends a £40 savings credit. CTR income rises from £14,650.54 to £14,810.54, and the award falls from £1,732.29 to £1,700.29.
  • UC capital:
    • Oxford, with a UC capital assessment of £15,000 against £20,000 of household property: CTR £2,000;
    • an Oxford IS recipient: CTR £2,000;
    • Wales: capital £15,000, assumed yield £1,879.20, CTR £1,500;
    • Scotland in 2026: own calculation, nil;
    • Scotland in 2021: UC assessment, £1,500.
  • A UC award the benefit cap reduces to nil:
    • Wales and Scotland 2021: capital £15,000, tariff £1,879.20, CTR £2,000;
    • Oxford: £2,000;
    • Scotland 2026: own capital, tariff £2,088, nil.
  • A pensioner couple with a UC input: England and Wales assess them as pensioners, so capital is £18,000 and CTR nil.
  • Sub-tenant rent with UC: Wales and Scotland 2021 do not count it, because their income is the UC assessment (CTR £1,500).
  • Scottish scheme selection:
    • a mixed-age couple on UC;
    • a joint UC award held only by people over pension age (£5,160);
    • sub-tenant rent counted in 2021 but not in 2023.
  • The tax rule:
    • a shared Step 6 reduction (63.60 deducted);
    • a High Income Child Benefit Charge not deducted;
    • the finance-cost reduction taken off the tax on rent (286, or 124.60 with other credits);
    • the floor, with income_tax supplied as an isolation (statutory liability £500 under ITA s.29(2)).
  • Disregards: the £20, £4 and pre-2003 disregards, the one-occupier rule, and a dependant's sublet rent not counting.
  • Property receipts. Where these cases use the property allowance, gross receipts are supplied (property_rental_income). Main now treats a reported profit above £1,000 as already net of the allowance.

• Existing cases that change:

  • Pension Credit "Case 4", rent from a let property: income 15,260 → 4,784, Pension Credit 0 → 7,592.
  • Main's "Positive property income still counts in Pension Credit income": it doesn't (Sch IV para 18). Income is 20,914 → 18,514, the same as without the property.
  • Main's "Housing Benefit, no finance costs": 29,454 → 24,654. The rent and its tax don't count.
  • Disregard guarantee credit recipients' income and capital in pensioner council tax reduction #1909's "pensioner not claiming Pension Credit": capital 10,000 → 16,300 with the second property at 90%, so CTR 1,999.60 → 0.
  • Disregard guarantee credit recipients' income and capital in pensioner council tax reduction #1909's "capital of exactly 16,000": CTR 2,000 → 1,954.80 with the £624 tariff. The award uses the model's £256 allowance (Pensioner council tax reduction: applicable amount (post-April-2021 allowance, children, severe disability premium) and income (Child Benefit, tariff income) #1933), so it is a model-contract expectation.
  • Apply the Pension Credit earnings disregards (SPC Regs 2002 Sch VI) #2019's savings-band pair in pension_credit_earnings_disregard.yaml. A claimant aged 70 in 2024-25 has State Pension 12,000, interest 12,000 and attendance allowance. Both cases move from 10,914 to 12,000, and they still agree with each other.
    • With wages 1,040: income tax is 94 non-savings, plus (12,000 − 4,530 starting-rate band − 1,000 PSA) × 20% = 1,294 on savings, giving 1,388. Without wages the tax is (12,000 − 570 unused allowance − 5,000 − 1,000) × 20% = 1,086. So by d1424 the tax on earnings is 302, net earnings are 738, and the £20 disregard gives 738.
    • The 1,086 due without earnings is all tax on interest. Pension Credit does not count interest, so reg 17(10)(a) does not disregard tax on it, and pension_credit_uncounted_income_tax_without_earnings = 1,086. The tax deducted is 1,388 − 1,086 = 302, and income is 12,000 + 1,040 − 302 − 738 = 12,000.
    • Without wages: income tax is 1,086, all on interest, so none is deducted: 12,000. On main both were 10,914, because main deducted the tax on interest it does not count.
  • Apply the Pension Credit earnings disregards (SPC Regs 2002 Sch VI) #2019's property reference in test_pension_credit_earnings_disregard_properties.py (expected PC income) now subtracts the same term, income_tax less legacy_means_test_income_tax, from its own no-earnings simulation (not the model's branch). It also asserts that the model's pension_credit_uncounted_income_tax_without_earnings equals that reference, as a differential check of the branch. Its draws include interest of 0 or 3,000, so both the nil and non-nil cases are exercised.

• At 1b8f2de, after merging main (Count IIDB, SDA and incapacity benefit in Council Tax Reduction income #2512, Apply the Pension Credit earnings disregards (SPC Regs 2002 Sch VI) #2019), run single-process under the d1811 host hold:

  • the focused YAML (Pension Credit, legacy means tests, CTR and HB directories): 903 passed;
  • eleven property files: 67 passed, after the two restatements below.

  The full YAML tree, the -n 4 property run and impact v7 wait for the hold to release. Everything below is at b379e00 or aaf44f1 unless stated.

• The Hypothesis properties above, Disregard guarantee credit recipients' income and capital in pensioner council tax reduction #1909's updated CTR properties, and Means-test the Council Tax Reduction applicant and partner, not the benefit unit's claimant #2078's applicant and legacy-award-reader properties: 33 tests, all passing at b379e00. The full YAML tree passes too: 3,946 cases. 91bca5b adds one case to income_from_capital.yaml, and aaf44f1 corrects a citation. All 61 cases in that file pass at aaf44f1.

• Mutation check (round 3), at b379e00: 26 mutations of the new code, including each round-3 fix. 25 were killed, each failing 1 to 17 cases. The survivor treated Oxford's Universal Credit test as a payment rather than an award. It is killed by a case added at 91bca5b: Oxford adds no tariff income for an award capped to nil.

• Mutation check of the Apply the Pension Credit earnings disregards (SPC Regs 2002 Sch VI) #2019 merge term, at 1b8f2de. Three mutations, all killed: not subtracting it (7 cases fail); counted tax from the actual world rather than without earnings (2); counted tax on the income_tax basis (2). The max_(0, …) floor is an equivalent mutant: counted tax never exceeds income_tax.

Enhanced FRS impact

Every figure is from real Microsimulation runs on private copies of the certified dataset, from clean trees. Nothing is scaled, interpolated or allocated:

• dataset: enhanced_frs_2024_25.h5 from policyengine-uk-data 1.58.1 (sha256 056e80fd8e91…, the file tests/certified_dataset.yaml pins);
• main at 76cfc9e, the base of this branch's last merge;
• this branch at b379e00. The later commits (91bca5b, aaf44f1) add a YAML case and correct a citation; the model code is unchanged.

The figures are identical to those from the previous merge base (61b5854): the #2078 merge did not move them. Impact at 9440170, against main with #2512 and #2019, will be re-run when the disk pause lifts.

Year	Pension Credit, main (£bn)	PC change	PC gainers, k units (records)	PC losers, k units (records)	CTR change	CTR gainers / losers (records)	Household net income
2025	6.66	−£452.0m	7.2 (31)	79.1 (58)	+£4.6m	30 / 68	−£447.2m
2026	7.04	−£554.3m	7.2 (31)	81.1 (67)	+£5.6m	31 / 62	−£548.7m
2027	7.02	−£602.2m	7.2 (30)	81.4 (66)	+£5.7m	34 / 64	−£596.5m
2028	7.09	−£648.3m	5.6 (28)	83.0 (67)	+£6.4m	35 / 66	−£642.4m
2029	7.21	−£694.0m	5.4 (25)	84.1 (69)	+£6.8m	35 / 74	−£687.8m
2030	7.34	−£744.0m	5.1 (24)	91.9 (73)	+£7.3m	35 / 80	−£737.5m
2031	7.44	−£790.2m	5.2 (24)	92.9 (75)	+£7.9m	37 / 88	−£783.4m

The other benefits:

• Housing Benefit falls by less than £0.002bn a year, from 16 to 18 records.
• Income Support (2025), Universal Credit and tax credits do not change.
• Poverty status changes for at most 8 person records in any year, so no poverty figure is given.

2026, step by step. Real runs, each adding one part of the change to the last (scratch commits, not for merge). Interest and dividends were run as separate steps, but they are shown together: the interest step alone rests on fewer than ten records.

Step	Pension Credit	Council tax reduction	Housing Benefit
1. CTR capital: property at 90% less secured debt, the UC assessment, the passport disregards, Oxford's Appendix 6	0	0	0
2. National CTR tariff income	0	−£0.3m: 5.4k units lose (9 FRS + 22 SPI-synthetic records)	0
3. Rent no longer counted, and its tax (net of the finance-cost reduction) no longer deducted	+£14.0m: 7.2k units gain, 5.0k newly entitled (17 FRS + 15 SPI)	+£22.5m: 31.5k gain (12 FRS + 21 SPI)	0
4. Tax on interest and dividends no longer deducted	−£568.3m: 81.1k units lose, 1.0k lose all (66 FRS + 2 SPI)	−£16.6m: 32.3k lose (26 FRS + 10 SPI)	−£0.4m: 4.4k lose (18 FRS)
5. Step 7 charges no longer deducted, remaining reductions shared	0	0	0
Total	−£554.3m (gains £13.8m, losses £568.2m)	+£5.6m (gains £9.3m, losses £3.7m)	−£0.4m

Why step 4 is so large. On main, Pension Credit income counts neither dividends nor interest (its list in guarantee_credit/income.yaml), but it deducts the person's whole income tax, including the tax on them. A pensioner with large dividends therefore has their Pension Credit income cut by tax on income that was never counted. Among the 66 FRS and 2 SPI records that lose:

• the weighted-mean tax on dividends is £7,066 a year;
• main's weighted-mean Pension Credit income is £6,093, against £13,159 once that tax is not deducted;
• weighted-mean guarantee credit falls from £11,681 to £4,654.

Their weighted-mean dividends are £44,078 (median £2,149) against £14,443 of Pension Credit capital. Those dividends come from policyengine-uk-data's imputation: 1.58.1's impute_income() replaces every FRS respondent's dividend_income with an SPI-trained QRF draw (impute_over_incomes(dataset, model, ["dividend_income"])). So the size of step 4 rests on imputed dividends that the recorded capital does not support. Its direction follows from the law.

Why step 1 changes nothing here. In 2026, 292 benefit-unit records receiving CTR have land or other property:

• 275 are English working-age households and 4 are in Northern Irish ones, all outside any simulated scheme. The dataset has no local-authority input, so English households take the model's default authority, which has no simulated working-age scheme. council_tax_benefit keeps their reported awards.
• 13 are on supported routes, and their CTR does not change at this step.

Step 2 is small for the same reason: tariff income changes awards only where a national scheme is simulated.

Checks between real runs, all passing:

• Step 2 (tariff): it raises CTR income by exactly the new tariff income, for every unit.
• Step 3 (rent): it lowers each means-test income by exactly the unit's rent less its tax (net of the finance-cost reduction), wherever neither run is at a floor, to float32 rounding. The rent and tax are summed over the members each test counts. HB and CTR leave out units with Pension Credit, whose savings-credit-only routes follow the Pension Credit assessment.

Most of the gross flow comes from the data, not the rule

Let-property capital is missing. In the dataset:

• 82% of property income (£48.1bn of £58.5bn in 2026) is in benefit units whose household records no let-property value;
• the share is 95% (£17.7bn of £18.7bn) for units with someone over State Pension age;
• 95% of step 3's Pension Credit gain is in such units.

In law those units have the let property as capital, which yields deemed income or ends entitlement. Treating rent as capital is right, but here it leaves no capital behind. So step 3's gain overstates what the rule does to a household whose capital is recorded.

Dividends are imputed (step 4 above).

Two sensitivities (real runs of main and this branch, 2026):

Dataset	PC change	PC gainers / losers, k units (records)	CTR change	Household net income
Certified, as above	−£554.3m	7.2 (31) / 81.1 (67)	+£5.6m	−£548.7m
Capital-consistent copy of it (see below)	−£562.4m	3.4 (17) / 81.1 (66)	−£8.0m	−£578.1m
uk-data#498 rebuild (see below)	+£114.2m	55.8 (36) / 1.8 (10)	+£11.1m	+£136.1m

• Capital-consistent copy. Each household's savings, corporate_wealth and let-property value are raised where needed to at least interest / 4%, dividends / 4% and rent / 7%, on a copy of the certified file. These are assumed yields, not observed capital. With the capital recorded, Pension Credit gainers fall from 7.2k to 3.4k units, and CTR falls (−£8.0m): main's CTR capital is savings only, so the raised property values reach only this branch's capital and tariff income.
• uk-data#498 rebuild. It keeps FRS-reported dividends instead of imputing them. It was built locally in early October on the data code of that time, so it predates 1.58.1, and its weights, population and several other inputs differ too. With reported dividends, the step-4 losses largely disappear and Pension Credit rises. This is the PR's effect on that dataset, not the effect of reported dividends alone.

For any one household, the direction of the change follows from the law. The net total depends on how the data record capital and dividends.

Not counted here, though the law counts it:

• owner-occupiers' sublet rent, which sits in property_income until uk-data#508;
• board and lodging receipts, which Model rent from boarders, lodgers and sub-tenants for the householder #2002 adds.

Overlaps

• Stacked on this branch: Model rent from boarders, lodgers and sub-tenants for the householder #2002, the householder boarder/lodger work (branch boarder-lodger-rent). It extends legacy_benefits_home_letting_income with lodger and boarder receipts, and counts rent-a-room tax as tax on counted income in legacy_means_test_income_tax.
• The "Add missing Pension Credit income sources" branches append to the Pension Credit income list. They leave property income and the tax line to this PR.
• Replace generic child and adult flags with each programme's legal definitions #1896 (merged) restricted the four formulas to the claimant, partner and the programme's children. This branch merges it and keeps both changes; legacy_benefits_home_letting_income counts only the claimant's and partner's rent. Give the legacy severe disability premium its statutory conditions (stacked on #1896) #1946 and Use one carer attribution for the legacy severe disability premium and the Pension Credit addition (stacked on #1946 and #1951) #1977 stack on Replace generic child and adult flags with each programme's legal definitions #1896 and change premiums, not these lines.
• Count Carer's Allowance and Carer Support Payment as Pension Credit income #1952 (merged) added carer benefits to the PC list and HB PERSONAL_BENEFITS; merged here too.
• Count Carer Support Payment as Council Tax Reduction income #1992 (Carer Support Payment as CTR income) edits the same CTR income formula.
• Apply the Pension Credit earnings disregards (SPC Regs 2002 Sch VI) #2019 (merged) and Count statutory sick, maternity and paternity pay as Pension Credit earnings #2509 (open, statutory sick, maternity and paternity pay as Pension Credit earnings). This PR adds a third branch to Apply the Pension Credit earnings disregards (SPC Regs 2002 Sch VI) #2019's earnings counterfactuals: the counted tax without earnings, zeroing employment_income and self_employment_income. Count statutory sick, maternity and paternity pay as Pension Credit earnings #2509 widens the employed-earnings set to employed_earnings_sources(...). Whichever lands second makes this branch zero the same set, with the same any-earnings shortcut, and updates test_pension_credit_tax_branch_reuse.py's expected branch keys.
• Means-test the Council Tax Reduction applicant and partner, not the benefit unit's claimant #2078 (merged) means-tests the CTR applicant and partner. Its applicant_has_universal_credit helper now reads this PR's council_tax_reduction_universal_credit_award, so the local schemes, Oxford and this PR's routes share one award test. Its passport already leaves out a household head who applies alone.
• Value means-tested capital less 10% sale expenses and secured debt (UC reg 49 and legacy equivalents) #1969 values means-tested capital less sale expenses and secured debt for the DWP benefits, Pension Credit included (SPC reg 19). The savings-credit-only CTR route uses Pension Credit's capital, so Value means-tested capital less 10% sale expenses and secured debt (UC reg 49 and legacy equivalents) #1969 lands first, and this PR then adds the savings-credit-exit property cases. The two PRs do not touch the same capital variable.
• Give Scotland and Wales working-age council tax reduction their own rules (UC routes, passport, child amounts) #1966 gives Scottish and Welsh working-age CTR their own route (UC income, passport, child amounts). Its capital and tariff should reuse this PR's council_tax_reduction_assessable_capital and council_tax_reduction_universal_credit_award, so that the property, the secured debt and the passported disregards carry over.

Related gaps (not changed here)

• Pensioners without Pension Credit are tested on household savings only for the council tax reduction capital limit #1936: this PR adds land and property to CTR capital. Shares and other investments wait for the pension-wealth split.
• Pensioner council tax reduction: applicable amount (post-April-2021 allowance, children, severe disability premium) and income (Child Benefit, tariff income) #1933: this PR adds the tariff income. The pensioner applicable amount (the £238 allowance from April 2021, children, the severe disability premium) and Child Benefit in pensioner income remain.
• income_tax nets Step 6 reductions against Step 7 charges, contrary to ITA 2007 s.29(2). Limit Income Tax reductions to the Step 5 tax so they don't offset Step 7 charges #2545 (issue Income tax reductions offset the Step 7 charges (HICBC, annual allowance charge) #2544) fixes it. This PR's floor fixture supplies income_tax, so it holds either way.
• council_tax_reduction_pensioner treats a family entitled to UC as having an award whether or not it claims (main's approximation). The UC routes here require a claim.
• Capital stocks disagree with income from capital, so UC capital tests miss rent, share and savings holders policyengine-uk-data#495: capital stocks disagree with income from capital (the 82% above).
• Move SUBRENT from property_income to sublet_income, after policyengine-uk reads sublet_income policyengine-uk-data#508: owner-occupiers' SUBRENT into sublet_income.
• Tax credits: the ISA and rent-a-room disregards (reg 10(2)(a) Table 4; reg 11(2)) are a separate follow-up.

axiom: TheAxiomFoundation/rulespec-uk#483 queued. It is a dispatch-ready pe-parity issue covering:

• IS reg 48(4) and Sch 9;
• HB reg 46(4) and Sch 5;
• HB (SPC) reg 29(1)(i), (p), (v), reg 33(12) and Sch 5;
• SPC reg 15(5)(e), (i), reg 17(10) and Sch IV paras 8, 9, 18;
• the JSA and ESA equivalents;
• the CTR schemes with their capital, sale-expense and tariff rules;
• tax on counted income.

Steps 1-4 can be dispatched through the signed encoder now, on Max's approval. The rest wait on a corpus ingest.

🤖 Generated with Claude Code

Reproducer: policyengine_uk/tests/policy/baseline/gov/dwp/legacy_means_tests/income_from_capital.yaml::Pension Credit ignores rent from a let property, policyengine_uk/tests/policy/baseline/gov/dwp/legacy_means_tests/income_from_capital.yaml::Welsh working-age tariff income on a let property below the capital limit, policyengine_uk/tests/policy/baseline/gov/dwp/legacy_means_tests/income_from_capital.yaml::Wales uses the Universal Credit capital assessment when the benefit cap reduces the award to nil, policyengine_uk/tests/test_legacy_means_test_income_from_capital_properties.py::test_income_from_capital_changes_no_legacy_means_test

[github-actions]

Aggregate impact on certified data: pass

Base 72d4aa7fd8 against head d073f86078, both on enhanced_frs_2024_25.h5 (policyengine-uk-data 1.58.1, sha256 056e80fd8e91), fiscal years 2025-26 to 2031-32. Each year is a full microsimulation run on each side.

Checks: 0 broken by this change, 1 failing on both sides, 0 fixed. Moves flagged for review: 45 (thresholds in report_spec.yaml; a flag does not fail the job).

Workflow run and full report

Notes

• In the years a figure from fewer than 10 records is suppressed (spending.disabled_students_allowance), every total containing it, and the decile incomes, are rebuilt from their other components, so no published total includes it. Those totals are marked †. A change is withheld where the two sides leave out different figures and can't be lined up.

Moves flagged for review

Measure	Year	Base	Head	Change
Pension Credit	2031-32	£7.44bn	£6.65bn	-£790.1m
Pension Credit	2030-31	£7.34bn	£6.60bn	-£744.0m
Pension Credit	2029-30	£7.21bn	£6.51bn	-£694.0m
Pension Credit	2028-29	£7.09bn	£6.44bn	-£648.3m
Pension Credit	2027-28	£7.02bn	£6.42bn	-£602.2m
Pension Credit	2026-27	£7.04bn	£6.48bn	-£554.3m
Pension Credit	2025-26	£6.66bn	£6.21bn	-£452.0m
Relative poverty, before housing costs: pensioners	2027-28	1,625k	1,649k	+24.5k
Relative poverty, before housing costs: pensioners	2027-28	14.1%	14.3%	+0.21pp
Decile 10: mean household_net_income per household	2031-32	£131,885	£131,649	-£236
Decile 10: mean household_net_income per household	2030-31	£129,082	£128,859	-£223
Decile 10: mean household_net_income per household	2029-30	£126,773	£126,562	-£211
Decile 10: mean household_net_income per household	2028-29	£124,563	£124,365	-£198
Decile 10: mean household_net_income per household	2027-28	£122,413	£122,227	-£185
Government balance, each receipt once	2030-31	£500.67bn	£501.41bn	+£737.5m
Government balance, each receipt once	2031-32	£532.39bn	£533.18bn	+£783.3m
gov_balance	2030-31	£503.80bn	£504.54bn	+£737.5m
gov_balance	2031-32	£535.52bn	£536.31bn	+£783.3m
Government balance, each receipt once	2029-30	£472.97bn	£473.66bn	+£687.8m
gov_balance	2029-30	£476.10bn	£476.79bn	+£687.8m
Government balance, each receipt once	2028-29	£445.24bn	£445.88bn	+£642.4m
Decile 10: mean household_net_income per household	2026-27	£120,464	£120,290	-£173
gov_balance	2028-29	£448.37bn	£449.01bn	+£642.4m
Government balance, each receipt once	2027-28	£419.09bn	£419.69bn	+£596.5m
gov_balance	2027-28	£422.22bn	£422.82bn	+£596.5m
Government balance, each receipt once	2026-27	£388.44bn	£388.99bn	+£548.7m
gov_balance	2026-27	£391.57bn	£392.12bn	+£548.7m
gov_spending	2031-32	£591.27bn	£590.48bn	-£783.4m
household_benefits	2031-32	£591.27bn	£590.48bn	-£783.4m
Government spending	2031-32	£591.27bn	£590.48bn	-£783.4m
gov_spending	2030-31	£582.12bn	£581.38bn	-£737.7m
household_benefits	2030-31	£582.12bn	£581.38bn	-£737.7m
Government spending	2030-31	£582.12bn	£581.38bn	-£737.7m
Government balance, each receipt once	2025-26	£362.88bn	£363.33bn	+£447.2m
gov_balance	2025-26	£366.01bn	£366.46bn	+£447.2m
gov_spending	2029-30	£572.87bn	£572.18bn	-£688.1m
household_benefits	2029-30	£572.87bn	£572.18bn	-£688.1m
Government spending	2029-30	£572.87bn	£572.18bn	-£688.1m
Decile 10: mean household_net_income per household	2025-26	£117,623	£117,483	-£140
gov_spending	2028-29	£564.32bn	£563.67bn	-£642.7m

5 more flags are in the report artifact.

Receipts by tax head

Measure	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
TV licence fee	-£0.4m	-£0.4m	-£0.4m	-£0.4m	-£0.3m	-£0.2m	-£0.2m

Spending by benefit and service

Measure	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
Pension Credit	-£452.0m	-£554.3m	-£602.2m	-£648.3m	-£694.0m	-£744.0m	-£790.1m
Winter Fuel Payment	+£686	-£5,374	+£0.2m	-£5,416	-£0.1m	-£0.1m	-£0.1m
Housing Benefit	-£0.2m	-£0.4m	-£0.7m	-£0.8m	-£0.8m	-£0.8m	-£1.1m
Council Tax Reduction	+£4.6m	+£5.6m	+£5.7m	+£6.4m	+£6.8m	+£7.3m	+£7.9m
Disabled Students' Allowance	suppressed	suppressed	suppressed	suppressed	suppressed	suppressed	suppressed

Caseloads

Measure	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
Pension Credit	+3.9k	+3.9k	+3.3k	+1.6k	+1.4k	+653	+364
Winter Fuel Payment	+3	-27	+1.2k	-27	-669	-672	-675
Council Tax Reduction	+3.9k	+3.4k	+3.7k	+8.3k	+8.3k	+8.3k	+9.0k
Disabled Students' Allowance	suppressed	suppressed	suppressed	suppressed	suppressed	suppressed	suppressed

Government balance, each component counted once

Measure	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
Government receipts, each component once	-£0.4m	-£0.4m	-£0.4m	-£0.4m	-£0.3m	-£0.2m	-£0.2m
Government spending	-£447.6m †	-£549.2m †	-£597.0m †	-£642.7m †	-£688.1m †	-£737.7m †	-£783.4m †
Government balance, each receipt once	+£447.2m †	+£548.7m †	+£596.5m †	+£642.4m †	+£687.8m †	+£737.5m †	+£783.3m †

Model totals

Measure	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
gov_tax	-£0.4m	-£0.4m	-£0.4m	-£0.4m	-£0.3m	-£0.2m	-£0.2m
household_tax	-£0.4m	-£0.4m	-£0.4m	-£0.4m	-£0.3m	-£0.2m	-£0.2m
pre_budget_change_household_tax	-£0.4m	-£0.4m	-£0.4m	-£0.4m	-£0.3m	-£0.2m	-£0.2m
gov_spending	-£447.6m †	-£549.2m †	-£597.0m †	-£642.7m †	-£688.1m †	-£737.7m †	-£783.4m †
household_benefits	-£447.6m †	-£549.2m †	-£597.0m †	-£642.7m †	-£688.1m †	-£737.7m †	-£783.4m †
gov_balance	+£447.2m †	+£548.7m †	+£596.5m †	+£642.4m †	+£687.8m †	+£737.5m †	+£783.3m †

Household income totals

Measure	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
Household net income	-£447.2m †	-£548.7m †	-£596.5m †	-£642.4m †	-£687.8m †	-£737.5m †	-£783.3m †
Household net income (HBAI definition)	-£447.2m	-£548.7m	-£596.5m	-£642.4m	-£687.8m	-£737.5m	-£783.3m

Poverty rates

Measure	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
Absolute poverty, before housing costs: everyone	-0.00pp	-0.00pp	+0.00pp	+0.00pp	-0.00pp	-0.00pp	-0.00pp
Absolute poverty, before housing costs: pensioners	-0.00pp	-0.00pp	+0.00pp	+0.00pp	-0.00pp	-0.00pp	-0.00pp
Absolute poverty, after housing costs: everyone	-0.00pp	-0.00pp	-0.00pp	-0.00pp	-0.00pp	-0.00pp	-0.00pp
Absolute poverty, after housing costs: pensioners	-0.00pp	-0.00pp	-0.00pp	-0.00pp	-0.00pp	-0.00pp	-0.00pp
Relative poverty, before housing costs: everyone	-0.00pp	-0.00pp	+0.04pp	-0.00pp	+0.00pp	-0.00pp	-0.00pp
Relative poverty, before housing costs: children	0	0	+0.01pp	0	+0.00pp	0	0
Relative poverty, before housing costs: working-age adults	0	0	+0.01pp	0	+0.00pp	0	0
Relative poverty, before housing costs: pensioners	-0.00pp	-0.00pp	+0.21pp	-0.00pp	+0.01pp	-0.00pp	-0.00pp
Relative poverty, after housing costs: everyone	-0.00pp	-0.00pp	-0.00pp	-0.00pp	-0.00pp	-0.00pp	-0.00pp
Relative poverty, after housing costs: pensioners	-0.00pp	-0.00pp	-0.00pp	-0.00pp	-0.00pp	-0.00pp	-0.00pp

People in poverty

Measure	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
Absolute poverty, before housing costs: everyone	-346	-347	+8	+8	-10	-353	-355
Absolute poverty, before housing costs: pensioners	-346	-347	+8	+8	-10	-353	-355
Absolute poverty, after housing costs: everyone	-176	-177	-177	-178	-179	-180	-181
Absolute poverty, after housing costs: pensioners	-176	-177	-177	-178	-179	-180	-181
Relative poverty, before housing costs: everyone	-346	-347	+28.8k	-350	+1.3k	-353	-355
Relative poverty, before housing costs: children	0	0	+1.2k	0	+167	0	0
Relative poverty, before housing costs: working-age adults	0	0	+3.0k	0	+354	0	0
Relative poverty, before housing costs: pensioners	-346	-347	+24.5k	-350	+817	-353	-355
Relative poverty, after housing costs: everyone	-487	-177	-177	-178	-179	-180	-181
Relative poverty, after housing costs: pensioners	-487	-177	-177	-178	-179	-180	-181

Inequality

Measure	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
Gini coefficient, equivalised HBAI income before housing costs	-0.0002	-0.0002	-0.0002	-0.0002	-0.0002	-0.0002	-0.0002

Mean household net income in each side's own deciles

Measure	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
Decile 1: mean household_net_income per household	+£0.41 †	+£0.43 †	+£0.52 †	+£0.49 †	+£0.48 †	+£0.48 †	+£0.49 †
Decile 2: mean household_net_income per household	+£3.20 †	+£6.71 †	+£4.88 †	+£4.03 †	+£8.24 †	+£4.07 †	+£4.18 †
Decile 3: mean household_net_income per household	-£4.01 †	-£5.64 †	-£5.26 †	-£4.85 †	-£0.94 †	-£3.49 †	-£3.58 †
Decile 4: mean household_net_income per household	-£0.78 †	+£1.55 †	+£2.60 †	+£2.14 †	-£2.11 †	-£2.14 †	+£1.18 †
Decile 5: mean household_net_income per household	+£0.42 †	-£2.31 †	+£6.01 †	-£2.11 †	+£4.10 †	+£0.89 †	-£0.95 †
Decile 6: mean household_net_income per household	-£0.14 †	+£0.93 †	-£3.31 †	-£50 †	-£0.82 †	-£1.49 †	-£0.85 †
Decile 7: mean household_net_income per household	-£1.36 †	-£3.75 †	-£3.88 †	+£28 †	-£12 †	-£12 †	-£5.67 †
Decile 8: mean household_net_income per household	-£4.47 †	-£4.60 †	-£4.84 †	+£3.22 †	+£10 †	+£12 †	+£11 †
Decile 9: mean household_net_income per household	-£0.17 †	-£0.97 †	-£1.00 †	-£1.01 †	-£1.05 †	-£1.14 †	-£0.99 †
Decile 10: mean household_net_income per household	-£140 †	-£173 †	-£185 †	-£198 †	-£211 †	-£223 †	-£236 †

Standard reform costings (change in gov_balance)

Measure	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
Raise basic rate by 1pp	-£0.1m	-£0.1m	-£0.2m	-£0.2m	-£0.2m	-£0.3m	-£0.2m
Raise higher rate by 1pp	+£26,510	+£34,518	+£36,479	+£38,294	+£39,964	+£29,404	+£16,332
Raise personal allowance by ~800GBP/year	-£8.4m	-£9.0m	-£8.7m	-£8.6m	-£8.7m	-£8.9m	-£3.7m
Raise child benefit by 25GBP/week per additional child	-£0	+£0	+£0	-£0	0	0	0
Reduce Universal Credit taper rate to 20%	-£1.9m	-£2.1m	-£2.2m	-£2.4m	-£2.5m	-£2.7m	-£2.8m
Raise Class 1 main employee NICs rate to 10%	+£33,364	+£1	+£1	-£1	-£1	0	0
Raise VAT standard rate by 2pp	+£5	+£5	-£1	+£1	-£109	-£118	-£13
Raise additional rate by 3pp	-£0	0	+£0	-£0	0	0	+£0
Raise the Universal Credit standard allowance by 10%	-£0.5m	-£0.5m	-£0.4m	-£0.2m	+£58,918	+£0.3m	+£0.4m
Raise the State Pension by 10%	+£16.9m	+£18.1m	+£18.9m	+£19.0m	+£19.4m	+£19.8m	+£20.1m

Household net income by decile

Mean change in household net income per household, and as a share of the decile's base income; households stay in the base run's deciles.

Base decile	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
Decile 1	+£1 (+0.0%)	+£1 (+0.0%)	+£1 (+0.0%)	0	0	0	0
Decile 2	+£1 (+0.0%)	+£2 (+0.0%)	+£1 (+0.0%)	+£1 (+0.0%)	+£1 (+0.0%)	+£1 (+0.0%)	+£1 (+0.0%)
Decile 3	+£1 (+0.0%)	+£1 (+0.0%)	+£1 (+0.0%)	+£1 (+0.0%)	+£1 (+0.0%)	+£1 (+0.0%)	+£1 (+0.0%)
Decile 4	0	0	0	0	0	0	0
Decile 5	+£2 (+0.0%)	+£2 (+0.0%)	+£2 (+0.0%)	+£2 (+0.0%)	+£3 (+0.0%)	+£3 (+0.0%)	+£3 (+0.0%)
Decile 6	+£1 (+0.0%)	+£1 (+0.0%)	+£1 (+0.0%)	+£1 (+0.0%)	+£1 (+0.0%)	+£1 (+0.0%)	+£1 (+0.0%)
Decile 7	0	0	-£1 (-0.0%)	-£1 (-0.0%)	-£1 (-0.0%)	-£1 (-0.0%)	-£1 (-0.0%)
Decile 8	fewer than 10 households change	-£1 (-0.0%)	-£1 (-0.0%)	-£1 (-0.0%)	-£1 (-0.0%)	-£1 (-0.0%)	-£1 (-0.0%)
Decile 9	fewer than 10 households change	fewer than 10 households change	fewer than 10 households change	fewer than 10 households change	fewer than 10 households change	fewer than 10 households change	fewer than 10 households change
Decile 10	fewer than 10 households change	fewer than 10 households change	fewer than 10 households change	fewer than 10 households change	fewer than 10 households change	fewer than 10 households change	fewer than 10 households change
all	-£14 (-0.0%)	-£18 (-0.0%)	-£19 (-0.0%)	-£20 (-0.0%)	-£22 (-0.0%)	-£23 (-0.0%)	-£25 (-0.0%)

Year	People gaining over £1	People losing over £1
2025-26	0.0%	0.2%
2026-27	0.0%	0.2%
2027-28	0.0%	0.2%
2028-29	0.0%	0.3%
2029-30	0.0%	0.3%
2030-31	0.0%	0.3%
2031-32	0.0%	0.3%

No change in any year: components the model counts twice; population; standard reforms: change in each reform's target.

Checks failing on both base and head (1)

• VAT is never negative (sign:vat): 2025-26: 76 units below zero, a weighted £-54,797,972 in total; 2026-27: 76 units below zero, a weighted £-56,271,349 in total; 2027-28: 76 units below zero, a weighted £-57,609,146 in total

Counted-once check

Each of 84 components was raised by £1 per unit in 2026-27, and every head of its totals was read household by household: its own head must rise by exactly £1, no other tax head may move, no other benefit may rise, and the model's own total must move by what its heads moved. A head that breaks a rule is measured again twice: with every other head held at its baseline value, and with every other head held at its value after the first £1 while the component rises again. It fails where either still shows the response. 0 failed; 0 were skipped.

• declared double count corporate_sdlt is still contained in expected_sdlt (coefficient 1.000; Corporate SDLT is counted twice in household and government tax totals #2159)

Provenance

Side	Commit	Runtime	Environment hash	Partition hash	Time
base	main 72d4aa7fd8	uk 2.144.0 (files 0fa63813021e), core 3.33.2, py 3.13.16 aarch64	fb8270a1434f	f210f83d5be4	1486.35s
head	#1995 merged into main d073f86078	uk 2.144.0 (files dcdc2482b8e1), core 3.33.2, py 3.13.16 aarch64	fb8270a1434f	f210f83d5be4	1610.57s

Dataset: hf://policyengine/policyengine-uk-data-private/enhanced_frs_2024_25.h5@2526edbbb687a3b54dbb11272e5389e4b62d2ac2, sha256 056e80fd8e9151d78f432a25cde863340baee81304c6216a37fb575ce8563784 (verified on both sides), policyengine-uk-data 1.58.1.

Receipts by tax head: head levels

Measure (head)	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
Income tax	£299.36bn	£319.12bn	£336.63bn	£351.79bn	£367.34bn	£385.47bn	£403.77bn
National Insurance (employee and self-employed)	£52.58bn	£54.94bn	£56.75bn	£58.48bn	£60.62bn	£62.57bn	£65.03bn
National Insurance (employer)	£152.64bn	£159.18bn	£164.14bn	£168.73bn	£176.11bn	£181.72bn	£188.90bn
Employer NI change borne by capital	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Employer NI change borne by consumers	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Capital gains tax	£12.62bn	£13.06bn	£13.55bn	£14.04bn	£14.54bn	£15.09bn	£15.65bn
Student loan repayments	£7.83bn	£8.12bn	£8.35bn	£8.56bn	£8.79bn	£9.04bn	£9.38bn
VAT	£253.71bn	£260.53bn	£266.72bn	£273.14bn	£279.83bn	£286.71bn	£293.71bn
Change in VAT from its baseline	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
VAT on private school fees	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Fuel duties	£24.53bn	£24.64bn	£26.64bn	£26.69bn	£26.42bn	£25.76bn	£26.35bn
Alcohol duties	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Tobacco duties	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Vehicle excise duties	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
TV licence fee	£4.28bn	£4.43bn	£4.44bn	£4.46bn	£4.48bn	£4.51bn	£4.53bn
Council tax	£49.56bn	£52.45bn	£55.78bn	£59.39bn	£62.98bn	£66.74bn	£70.70bn
High value council tax surcharge	£0.00bn	£0.00bn	£0.00bn	£0.48bn	£0.49bn	£0.51bn	£0.52bn
Northern Ireland domestic rates	£0.55bn	£0.58bn	£0.61bn	£0.63bn	£0.67bn	£0.70bn	£0.73bn
Business rates	£31.73bn	£31.73bn	£31.73bn	£31.73bn	£31.73bn	£31.73bn	£31.73bn
Stamp duty land tax (own purchases, and corporate until the	£10.06bn	£10.56bn	£10.98bn	£11.40bn	£11.81bn	£12.23bn	£12.64bn
Land transaction tax (Wales)	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Land and buildings transaction tax (Scotland)	£0.01bn	£0.01bn	£0.02bn	£0.02bn	£0.02bn	£0.02bn	£0.02bn
Unspecified tax change borne by capital	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Unspecified tax change borne by consumers	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Wealth tax	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Wealth tax excluding the main residence	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Land value tax	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Carbon tax	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn

Spending by benefit and service: head levels

Measure (head)	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
State Pension	£122.50bn	£127.12bn	£128.28bn	£130.21bn	£134.05bn	£138.02bn	£142.08bn
Pension Credit	£6.21bn	£6.48bn	£6.42bn	£6.44bn	£6.51bn	£6.60bn	£6.65bn
Winter Fuel Payment	£1.70bn	£1.68bn	£1.59bn	£1.57bn	£1.57bn	£1.55bn	£1.52bn
Pension Age Winter Heating Payment (Scotland)	£0.19bn	£0.20bn	£0.20bn	£0.21bn	£0.21bn	£0.22bn	£0.22bn
Universal Credit	£78.78bn	£83.08bn	£84.89bn	£86.65bn	£87.58bn	£88.99bn	£90.32bn
Housing Benefit	£8.59bn	£8.92bn	£9.19bn	£9.33bn	£9.61bn	£9.87bn	£10.15bn
Council Tax Reduction	£1.99bn	£2.04bn	£2.08bn	£2.13bn	£2.18bn	£2.24bn	£2.29bn
Employment and Support Allowance (income-related)	£2.12bn	£2.18bn	£2.23bn	£2.28bn	£2.33bn	£2.39bn	£2.45bn
Employment and Support Allowance (contribution-based)	£5.22bn	£5.36bn	£5.49bn	£5.62bn	£5.76bn	£5.90bn	£6.04bn
Jobseeker's Allowance (income-based)	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Jobseeker's Allowance (contribution-based)	£0.29bn	£0.30bn	£0.30bn	£0.31bn	£0.32bn	£0.33bn	£0.33bn
Income Support	£0.12bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Working Tax Credit	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Child Tax Credit	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Incapacity Benefit	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Personal Independence Payment	£27.05bn	£28.19bn	£28.94bn	£29.64bn	£30.37bn	£31.11bn	£31.87bn
Disability Living Allowance	£7.52bn	£7.83bn	£8.04bn	£8.24bn	£8.44bn	£8.65bn	£8.86bn
Attendance Allowance	£8.71bn	£9.08bn	£9.32bn	£9.55bn	£9.78bn	£10.02bn	£10.26bn
Carer's Allowance	£4.50bn	£4.69bn	£4.81bn	£4.93bn	£5.05bn	£5.17bn	£5.29bn
Carer Support Payment (Scotland)	£0.35bn	£0.37bn	£0.38bn	£0.39bn	£0.40bn	£0.41bn	£0.41bn
Carer's Allowance Supplement (Scotland)	£0.00bn	£0.05bn	£0.05bn	£0.05bn	£0.05bn	£0.05bn	£0.05bn
Severe Disablement Allowance	£0.03bn	£0.03bn	£0.03bn	£0.03bn	£0.03bn	£0.03bn	£0.03bn
Industrial Injuries Disablement Benefit	£0.51bn	£0.52bn	£0.53bn	£0.54bn	£0.56bn	£0.57bn	£0.59bn
Armed Forces Compensation Scheme	£0.61bn	£0.62bn	£0.64bn	£0.65bn	£0.67bn	£0.69bn	£0.70bn
War Widow's or Widower's Pension	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Child Benefit	£16.23bn	£16.91bn	£17.32bn	£17.73bn	£18.16bn	£18.60bn	£19.04bn
Scottish Child Payment	£0.50bn	£0.52bn	£0.53bn	£0.55bn	£0.56bn	£0.57bn	£0.58bn
Two Child Limit Payment (Scotland, counterfactual)	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Healthy Start vouchers	£0.05bn	£0.05bn	£0.05bn	£0.05bn	£0.05bn	£0.05bn	£0.05bn
Maternity Allowance	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Statutory Maternity Pay	£3.32bn	£3.41bn	£3.49bn	£3.57bn	£3.66bn	£3.75bn	£3.84bn
Statutory Paternity Pay	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Statutory Sick Pay	£1.13bn	£1.16bn	£1.19bn	£1.22bn	£1.25bn	£1.28bn	£1.31bn
Sure Start Maternity Grant	£0.01bn	£0.01bn	£0.01bn	£0.01bn	£0.01bn	£0.01bn	£0.01bn
Bereavement Support Payment	£0.67bn	£0.69bn	£0.70bn	£0.72bn	£0.74bn	£0.76bn	£0.78bn
Tax-Free Childcare	£0.55bn	£0.56bn	£0.57bn	£0.58bn	£0.60bn	£0.61bn	£0.59bn
Extended childcare entitlement	£2.66bn	£3.14bn	£3.23bn	£3.30bn	£3.38bn	£3.47bn	£3.55bn
Universal childcare entitlement	£3.32bn	£3.59bn	£3.69bn	£3.78bn	£3.88bn	£3.99bn	£4.08bn
Targeted childcare entitlement	£0.57bn	£0.60bn	£0.62bn	£0.63bn	£0.65bn	£0.66bn	£0.67bn
Care to Learn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Childcare Grant	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Parents' Learning Allowance	£0.20bn	£0.20bn	£0.20bn	£0.20bn	£0.20bn	£0.20bn	£0.20bn
Adult Dependants' Grant	£0.06bn	£0.06bn	£0.04bn	£0.04bn	£0.04bn	£0.04bn	£0.04bn
Travel Grant	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Disabled Students' Allowance	suppressed	suppressed	suppressed	suppressed	suppressed	suppressed	suppressed
16 to 19 Bursary Fund	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
NHS spending	£204.68bn	£205.46bn	£206.22bn	£207.04bn	£207.96bn	£208.89bn	£209.79bn
State education spending	£0.02bn	£0.02bn	£0.02bn	£0.02bn	£0.02bn	£0.02bn	£0.02bn
Transport subsidy spending	£25.15bn	£25.25bn	£25.34bn	£25.44bn	£25.55bn	£25.67bn	£25.78bn
Cost-of-living support payment	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Energy Bills Rebate	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Energy Price Guarantee subsidy	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Basic income	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Disability basic income	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Other public spending budget change	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn

Caseloads: head levels

Measure (head)	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
State Pension	11,308k	11,208k	10,906k	10,812k	10,860k	10,908k	10,955k
Pension Credit	1,494k	1,493k	1,481k	1,457k	1,459k	1,455k	1,451k
Winter Fuel Payment	7,091k	7,008k	6,595k	6,509k	6,490k	6,377k	6,242k
Pension Age Winter Heating Payment (Scotland)	806k	807k	807k	805k	809k	812k	816k
Universal Credit	6,371k	6,379k	6,409k	6,419k	6,395k	6,387k	6,371k
Housing Benefit	1,254k	1,252k	1,254k	1,240k	1,244k	1,247k	1,249k
Council Tax Reduction	3,188k	3,213k	3,226k	3,252k	3,269k	3,288k	3,301k
Employment and Support Allowance (income-related)	187k	188k	188k	189k	190k	190k	191k
Employment and Support Allowance (contribution-based)	722k	724k	727k	730k	733k	737k	740k
Jobseeker's Allowance (income-based)	0k	0k	0k	0k	0k	0k	0k
Jobseeker's Allowance (contribution-based)	67k	67k	68k	68k	68k	69k	69k
Income Support	25k	0k	0k	0k	0k	0k	0k
Working Tax Credit	0k	0k	0k	0k	0k	0k	0k
Child Tax Credit	0k	0k	0k	0k	0k	0k	0k
Incapacity Benefit	0k	0k	0k	0k	0k	0k	0k
Personal Independence Payment	3,581k	3,595k	3,608k	3,623k	3,639k	3,655k	3,671k
Disability Living Allowance	1,296k	1,301k	1,306k	1,311k	1,317k	1,323k	1,329k
Attendance Allowance	1,701k	1,708k	1,714k	1,721k	1,729k	1,736k	1,744k
Carer's Allowance	1,038k	1,042k	1,046k	1,050k	1,055k	1,059k	1,064k
Carer Support Payment (Scotland)	81k	82k	82k	82k	83k	83k	83k
Carer's Allowance Supplement (Scotland)	0k	82k	82k	82k	83k	83k	83k
Severe Disablement Allowance	4k	4k	4k	4k	4k	4k	4k
Industrial Injuries Disablement Benefit	137k	138k	139k	139k	140k	140k	141k
Armed Forces Compensation Scheme	94k	94k	94k	95k	95k	95k	96k
War Widow's or Widower's Pension	0k	0k	0k	0k	0k	0k	0k
Child Benefit	8,136k	8,165k	8,185k	8,215k	8,249k	8,282k	8,314k
Scottish Child Payment	352k	354k	355k	356k	357k	358k	357k
Two Child Limit Payment (Scotland, counterfactual)	0k	0k	0k	0k	0k	0k	0k
Healthy Start vouchers	200k	201k	202k	203k	204k	204k	205k
Maternity Allowance	0k	0k	0k	0k	0k	0k	0k
Statutory Maternity Pay	334k	335k	336k	338k	339k	341k	342k
Statutory Paternity Pay	0k	0k	0k	0k	0k	0k	0k
Statutory Sick Pay	182k	183k	183k	184k	185k	186k	186k
Sure Start Maternity Grant	26k	26k	26k	27k	27k	27k	27k
Bereavement Support Payment	98k	98k	99k	99k	100k	100k	101k
Tax-Free Childcare	1,017k	1,028k	1,028k	1,033k	1,034k	1,038k	1,023k
Extended childcare entitlement	665k	671k	675k	677k	682k	686k	687k
Universal childcare entitlement	986k	989k	992k	997k	1,002k	1,013k	1,015k
Targeted childcare entitlement	119k	120k	120k	121k	121k	122k	121k
Care to Learn	0k	0k	0k	0k	0k	0k	0k
Childcare Grant	0k	0k	0k	0k	0k	0k	0k
Parents' Learning Allowance	98k	99k	99k	100k	100k	100k	101k
Adult Dependants' Grant	18k	18k	12k	13k	13k	13k	13k
Travel Grant	0k	0k	0k	0k	0k	0k	0k
Disabled Students' Allowance	suppressed	suppressed	suppressed	suppressed	suppressed	suppressed	suppressed
16 to 19 Bursary Fund	0k	0k	0k	0k	0k	0k	0k
Cost-of-living support payment	0k	0k	0k	0k	0k	0k	0k
Energy Bills Rebate	0k	0k	0k	0k	0k	0k	0k
Energy Price Guarantee subsidy	0k	0k	0k	0k	0k	0k	0k
Basic income	0k	0k	0k	0k	0k	0k	0k
Disability basic income	0k	0k	0k	0k	0k	0k	0k

Government balance, each component counted once: head levels

Measure (head)	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
Government receipts, each component once	£899.46bn	£939.35bn	£976.35bn	£1,009.56bn	£1,045.84bn	£1,082.79bn	£1,123.66bn
Government spending	£536.13bn †	£550.36bn †	£556.65bn †	£563.67bn †	£572.18bn †	£581.38bn †	£590.48bn †
Government balance, each receipt once	£363.33bn †	£388.99bn †	£419.69bn †	£445.88bn †	£473.66bn †	£501.41bn †	£533.18bn †
Benefits in household_benefits but not in gov_spending	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn

Model totals: head levels

Measure (head)	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
gov_tax	£902.59bn	£942.48bn	£979.48bn	£1,012.69bn	£1,048.97bn	£1,085.92bn	£1,126.79bn
household_tax	£496.24bn	£522.77bn	£548.61bn	£570.81bn	£593.03bn	£617.48bn	£644.19bn
pre_budget_change_household_tax	£488.42bn	£514.65bn	£540.26bn	£561.77bn	£583.75bn	£607.94bn	£634.29bn
gov_spending	£536.13bn †	£550.36bn †	£556.65bn †	£563.67bn †	£572.18bn †	£581.38bn †	£590.48bn †
household_benefits	£536.13bn †	£550.36bn †	£556.65bn †	£563.67bn †	£572.18bn †	£581.38bn †	£590.48bn †
gov_balance	£366.46bn †	£392.12bn †	£422.82bn †	£449.01bn †	£476.79bn †	£504.54bn †	£536.31bn †

Components the model counts twice: head levels

Measure (head)	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
corporate_sdlt, counted again inside expected_sdlt	£3.13bn	£3.13bn	£3.13bn	£3.13bn	£3.13bn	£3.13bn	£3.13bn

Household income totals: head levels

Measure (head)	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
Household market income	£1,657.06bn	£1,719.25bn	£1,771.68bn	£1,821.99bn	£1,872.88bn	£1,930.99bn	£2,001.98bn
Household net income	£1,657.68bn †	£1,706.08bn †	£1,737.84bn †	£1,771.91bn †	£1,807.96bn †	£1,849.55bn †	£1,901.23bn †
Household net income (HBAI definition)	£1,466.24bn	£1,512.87bn	£1,545.04bn	£1,577.97bn	£1,611.95bn	£1,650.94bn	£1,701.33bn

Population: head levels

Measure (head)	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
People	69,514k	69,778k	70,036k	70,316k	70,626k	70,944k	71,249k
Benefit units	35,247k	35,381k	35,512k	35,654k	35,811k	35,972k	36,127k
Households	31,167k	31,285k	31,401k	31,526k	31,665k	31,808k	31,944k

Poverty rates: head levels

Measure (head)	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
Absolute poverty, before housing costs: everyone	15.9%	14.9%	15.5%	15.6%	15.7%	15.8%	15.7%
Absolute poverty, before housing costs: children	23.7%	20.9%	21.6%	21.4%	21.6%	21.8%	21.7%
Absolute poverty, before housing costs: working-age adults	13.8%	13.4%	14.0%	14.1%	14.2%	14.3%	14.3%
Absolute poverty, before housing costs: pensioners	13.7%	13.1%	13.2%	13.4%	13.5%	13.6%	13.6%
Absolute poverty, after housing costs: everyone	21.1%	20.6%	21.3%	21.5%	21.9%	22.2%	22.3%
Absolute poverty, after housing costs: children	32.1%	30.3%	30.9%	31.1%	31.7%	32.3%	32.5%
Absolute poverty, after housing costs: working-age adults	19.6%	19.4%	20.2%	20.4%	20.8%	21.0%	21.0%
Absolute poverty, after housing costs: pensioners	12.7%	12.5%	12.6%	12.9%	13.0%	13.1%	13.4%
Relative poverty, before housing costs: everyone	16.9%	16.4%	16.5%	16.5%	16.6%	16.7%	16.7%
Relative poverty, before housing costs: children	25.6%	23.5%	23.3%	23.2%	23.3%	23.4%	23.4%
Relative poverty, before housing costs: working-age adults	14.4%	14.4%	14.7%	14.8%	14.9%	15.1%	15.0%
Relative poverty, before housing costs: pensioners	14.8%	14.9%	14.3%	14.3%	14.2%	14.2%	14.4%
Relative poverty, after housing costs: everyone	21.7%	21.3%	21.4%	21.5%	21.7%	21.8%	22.0%
Relative poverty, after housing costs: children	33.0%	31.6%	31.2%	31.1%	31.5%	31.6%	32.0%
Relative poverty, after housing costs: working-age adults	20.0%	20.0%	20.3%	20.4%	20.6%	20.8%	20.9%
Relative poverty, after housing costs: pensioners	13.5%	13.1%	12.7%	12.8%	12.7%	12.7%	12.8%

People in poverty: head levels

Measure (head)	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
Absolute poverty, before housing costs: everyone	11,051k	10,426k	10,848k	10,947k	11,079k	11,209k	11,220k
Absolute poverty, before housing costs: children	3,560k	3,141k	3,261k	3,253k	3,298k	3,334k	3,335k
Absolute poverty, before housing costs: working-age adults	5,864k	5,737k	6,070k	6,165k	6,237k	6,315k	6,321k
Absolute poverty, before housing costs: pensioners	1,627k	1,549k	1,517k	1,529k	1,544k	1,560k	1,565k
Absolute poverty, after housing costs: everyone	14,659k	14,362k	14,899k	15,116k	15,444k	15,724k	15,870k
Absolute poverty, after housing costs: children	4,809k	4,556k	4,676k	4,719k	4,835k	4,939k	4,994k
Absolute poverty, after housing costs: working-age adults	8,333k	8,326k	8,775k	8,931k	9,122k	9,275k	9,329k
Absolute poverty, after housing costs: pensioners	1,518k	1,480k	1,449k	1,466k	1,487k	1,509k	1,547k
Relative poverty, before housing costs: everyone	11,760k	11,455k	11,533k	11,625k	11,707k	11,867k	11,916k
Relative poverty, before housing costs: children	3,840k	3,538k	3,515k	3,525k	3,546k	3,582k	3,603k
Relative poverty, before housing costs: working-age adults	6,154k	6,160k	6,368k	6,465k	6,537k	6,651k	6,652k
Relative poverty, before housing costs: pensioners	1,765k	1,757k	1,649k	1,634k	1,624k	1,634k	1,661k
Relative poverty, after housing costs: everyone	15,064k	14,863k	14,993k	15,090k	15,319k	15,489k	15,653k
Relative poverty, after housing costs: children	4,948k	4,756k	4,711k	4,715k	4,798k	4,840k	4,919k
Relative poverty, after housing costs: working-age adults	8,511k	8,559k	8,822k	8,917k	9,070k	9,192k	9,260k
Relative poverty, after housing costs: pensioners	1,604k	1,548k	1,460k	1,458k	1,451k	1,457k	1,475k

Inequality: head levels

Measure (head)	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
Gini coefficient, equivalised HBAI income before housing costs	0.3072	0.3049	0.3063	0.3069	0.3074	0.3081	0.3091

Mean household net income in each side's own deciles: head levels

Measure (head)	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
Decile 1: mean household_net_income per household	£17,707 †	£17,997 †	£17,942 †	£17,992 †	£18,326 †	£18,523 †	£18,684 †
Decile 2: mean household_net_income per household	£28,366 †	£29,056 †	£28,677 †	£29,017 †	£29,381 †	£29,784 †	£30,336 †
Decile 3: mean household_net_income per household	£34,603 †	£35,881 †	£36,502 †	£37,003 †	£37,262 †	£37,820 †	£38,508 †
Decile 4: mean household_net_income per household	£39,328 †	£40,910 †	£41,810 †	£42,698 †	£43,184 †	£43,982 †	£45,130 †
Decile 5: mean household_net_income per household	£44,872 †	£46,145 †	£47,083 †	£47,607 †	£48,384 †	£49,252 †	£50,072 †
Decile 6: mean household_net_income per household	£47,930 †	£49,325 †	£50,268 †	£51,020 †	£52,169 †	£52,937 †	£54,221 †
Decile 7: mean household_net_income per household	£56,319 †	£57,575 †	£58,465 †	£59,442 †	£60,112 †	£61,596 †	£63,187 †
Decile 8: mean household_net_income per household	£69,246 †	£70,356 †	£71,631 †	£72,872 †	£74,338 †	£75,803 †	£77,574 †
Decile 9: mean household_net_income per household	£79,686 †	£82,009 †	£83,244 †	£84,445 †	£86,084 †	£87,569 †	£90,639 †
Decile 10: mean household_net_income per household	£117,483 †	£120,290 †	£122,227 †	£124,365 †	£126,562 †	£128,859 †	£131,649 †

Standard reform costings (change in gov_balance): head levels

Measure (head)	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
Raise basic rate by 1pp	£6.22bn	£6.50bn	£6.71bn	£6.90bn	£7.11bn	£7.35bn	£7.62bn
Raise higher rate by 1pp	£3.54bn	£3.82bn	£4.05bn	£4.27bn	£4.49bn	£4.76bn	£4.96bn
Raise personal allowance by ~800GBP/year	£-3.84bn	£-3.97bn	£-4.04bn	£-4.11bn	£-4.20bn	£-4.31bn	£-2.02bn
Raise child benefit by 25GBP/week per additional child	£-2.00bn	£-1.76bn	£-1.64bn	£-1.54bn	£-1.44bn	£-1.34bn	£-1.24bn
Reduce Universal Credit taper rate to 20%	£-20.54bn	£-21.10bn	£-21.45bn	£-21.88bn	£-21.96bn	£-22.33bn	£-22.79bn
Raise Class 1 main employee NICs rate to 10%	£11.06bn	£11.51bn	£11.83bn	£12.14bn	£12.47bn	£12.81bn	£13.29bn
Raise VAT standard rate by 2pp	£25.01bn	£25.68bn	£26.29bn	£26.92bn	£27.58bn	£28.26bn	£28.95bn
Raise additional rate by 3pp	£2.83bn	£3.07bn	£3.27bn	£3.47bn	£3.67bn	£3.91bn	£4.23bn
Raise the Universal Credit standard allowance by 10%	£-3.04bn	£-3.17bn	£-3.25bn	£-3.32bn	£-3.37bn	£-3.42bn	£-3.47bn
Raise the State Pension by 10%	£-8.90bn	£-9.11bn	£-9.01bn	£-9.05bn	£-9.25bn	£-9.49bn	£-9.76bn

Standard reforms: change in each reform's target: head levels

Measure (head)	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
Raise basic rate by 1pp: change in income_tax	£6.36bn	£6.65bn	£6.87bn	£7.07bn	£7.29bn	£7.53bn	£7.81bn
Raise higher rate by 1pp: change in income_tax	£3.55bn	£3.83bn	£4.06bn	£4.28bn	£4.50bn	£4.78bn	£4.97bn
Raise personal allowance by ~800GBP/year: change in income_tax	£-3.96bn	£-4.11bn	£-4.19bn	£-4.27bn	£-4.36bn	£-4.47bn	£-1.77bn
Raise child benefit by 25GBP/week per additional child: change in child_benefit	£2.34bn	£2.15bn	£2.03bn	£1.92bn	£1.82bn	£1.71bn	£1.59bn
Reduce Universal Credit taper rate to 20%: change in universal_credit	£20.53bn	£21.08bn	£21.44bn	£21.86bn	£21.95bn	£22.32bn	£22.78bn
Raise Class 1 main employee NICs rate to 10%: change in national_insurance	£11.33bn	£11.79bn	£12.13bn	£12.44bn	£12.78bn	£13.13bn	£13.62bn
Raise VAT standard rate by 2pp: change in vat	£25.01bn	£25.68bn	£26.29bn	£26.92bn	£27.58bn	£28.26bn	£28.95bn
Raise additional rate by 3pp: change in income_tax	£2.83bn	£3.07bn	£3.27bn	£3.47bn	£3.67bn	£3.91bn	£4.23bn
Raise the Universal Credit standard allowance by 10%: change in universal_credit	£3.04bn	£3.17bn	£3.25bn	£3.32bn	£3.37bn	£3.43bn	£3.47bn
Raise the State Pension by 10%: change in state_pension	£12.25bn	£12.71bn	£12.83bn	£13.02bn	£13.41bn	£13.80bn	£14.21bn

[MaxGhenis]

Coordination with #2211: its main-merge reconciliation is committed locally at 29e30044bf85dbb945f299dedacfc8419d458831, but remains unpushed pending the required disk-gated tests. Full hand-off: #2211 (comment)

The shared file's ordinary assessment is extracted into hb_income_before_deductions. This PR's two behavioral source/tax replacements should be applied inside that helper: line 56 property_income_after_finance_costs → legacy_benefits_home_letting_income; line 76 income_tax → legacy_means_test_income_tax. Shared documentation/reference hunks also overlap.

Retain this PR's capital-income intent while preserving #2211's Child Benefit/SSMG exclusions and main's claimant/partner mask, scoped JSA/ESA readers, counted disability benefits and pension-deduction parameter. The older child-inclusive formula in this branch should not replace those current-main rules during composition. No changes or test claims are being made for #1995 by this job.