Distributional effects

A central part of the IFS’s contribution to public debate is our analysis of the distributional effect of the tax and benefit system. Using large household datasets, IFS researchers evaluate the effect of changes to the tax and benefit system on households across the income distribution. Recent research has begun to consider the distributional effect of policies on the basis of lifetime income, rather than annual or monthly income.

The impact of tax and benefit reforms on household incomes

| Briefing Note

This election briefing note looks at the impact of tax and benefit reforms on household incomes.

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Redistribution by means of lotteries

| Journal Articles

Redistribution by means of lotteries

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A tighter benefit cap

| Observations

A lower cap on the total amount of benefits that households can receive comes into force tomorrow, affecting four times as many households as the previous benefit cap. Like the previous cap it will apply to out-of-work households of working age (with some exemptions, mainly due to disability). The cap will now be £23,000 a year in London and £20,000 elsewhere (there are lower caps for single adults without children set at £15,410 in London and £13,400 elsewhere). This compares to £26,000 nationwide under the previous cap, which has been in place since 2013. In this observation we look at the implications of a lower cap for government spending, the impact on the households affected, and how they might respond.

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