[MaxGhenis]

Fixes #2739

What and why

The bug. uc_latent_deduction_rate's formula returns zero where uc_has_deduction is false. uc_deduction_rate and the advance estimate read the latent rate itself, so a rate that a dataset or situation supplies skipped the flag. In the issue's example, an 85% protected floor gave £720.25 of deductions to a family whose flag was false.

The fix (option 1). A new helper, assigned_latent_deduction_rate in _deduction_amounts.py, returns the latent rate where uc_has_deduction is true and zero elsewhere. uc_deduction_rate reads it for the capped part and for the above-cap excess, and the advance estimate reads it too. A supplied rate now follows the formula's rule. Two explicit inputs still apply whatever the flag says, because each describes a known deduction rather than a draw from the distribution:

• uc_advance_repayment_amount, whose documented override (zero included) this keeps;
• uc_deduction_rate itself.

The code supports option 1:

• Microcosm. Its deduction writer (packages/microcosm-build/src/microcosm/build/uk_runtime/uc_deduction_attributes.py, Microcosm origin/main at 98aef7529) stores four columns: the two draws, uc_latent_deduction_rate and uc_deduction_combination. It writes a rate only where the incidence draw falls below the region's incidence (rates = np.where(assigned, rates, 0.0)). It stores no uc_has_deduction, so policyengine-uk computes the flag from the stored draw. The gate changes no deduction on such a dataset, under current law or a floor (differential below).
• uk-data. Its origin/main (e1acdf96) mentions none of the deduction inputs (the two draws, the flag, the latent rate, the combination and the advance amount), so the Enhanced FRS takes the formula path. The gate leaves that path unchanged under current law.

The flag under a protected floor: changed, with no change under current law. uc_has_deduction read the award left after the gross benefit cap. Under a floor, allocate_uc_reductions meets deductions first from the award before the cap, up to the floor allowance (uc_maximum_reduction). The cap reduction then takes whatever allowance is left. So a family that the gross cap takes to nil keeps its award less the allowance, where the award exceeds the allowance, and deductions can come from what it keeps. The flag now reads universal_credit_pre_benefit_cap − min(uc_benefit_cap_reduction, uc_maximum_reduction).

• Current law can't move. The floor is zero there, uc_maximum_reduction is infinite, and the minimum is the gross cap. The differential below finds the formula path bit-equal to origin/main.
• Stored data keeps origin/main's deductions. With the gate alone, a family on a stored-rate dataset would lose its deductions under a floor. That family is one whose draw assigns deductions and whose award the cap takes whole. origin/main takes them from its stored rate. On the property module's 24-unit stored dataset under an 85% floor, the gate alone (mutation M3 below) drops the deductions of 4 units, by up to £720.25 each. The floor-aware flag keeps them. On a dataset that stores rates as Microcosm does, deductions, the applied cap and the award then equal origin/main's, and the formula path gives the same.
• The model already counts such a family's debts. uc_award_carries_deductions is true for any family with an award before the cap in the baseline.
• Only the split moves. On the formula path a floor moves money between deductions and the applied cap reduction for these families. Their award changes by at most the penny a month that the minimum-payable rule keeps.

What users see.

• A household situation that supplies uc_latent_deduction_rate gets no deductions unless it also sets uc_has_deduction to true, or supplies an incidence draw that assigns them. Ten existing YAML cases (five in uc_deductions.yaml, five in uc_fixed_deductions.yaml) and three Python test files supplied a rate this way. They now set the flag, or in test_uc_tax_free_childcare_choice.py an incidence draw of 0.2, below London's 0.439. No expected value changed.
• On a dataset that stores latent rates, a reform that lowers incidence now drops the stored rates of the units the flag no longer assigns. One that raises it flags more units, but adds no deductions, because the dataset stores no rate for them. On origin/main, incidence reforms never reached stored rates. A unit that keeps the flag keeps its stored rate, while the formula rescales each draw by the new incidence, so stored rates don't cost an incidence reform in full.
• docs/book/validation/uc-deductions.md and the docstrings of the flag, the latent rate and the deduction rate state these rules.

Stored data. uc_has_deduction stays an engine formula over the stored draw, and its award test reads only reformable model outputs. A dataset that stores latent rates must now also store the draws that assign them. Microcosm stores both.

Invariants

These hold for every input. policyengine_uk/tests/test_uc_deduction_flag_properties.py checks properties 1 to 9 with Hypothesis over generated benefit units plus explicit examples, and property 10 on a fixed 24-unit dataset.

1. Flag gate. Where uc_has_deduction is false, uc_deductions is zero, for any supplied latent rate, combination, gross cap reduction and floor. The documented exceptions are an explicitly supplied uc_advance_repayment_amount, which the property covers, and an explicitly supplied uc_deduction_rate, which replaces the formula altogether.
2. Substitution. A supplied latent rate gives the same deductions, applied cap and award as where(uc_has_deduction, rate, 0).
3. The gate removes only disagreeing rates. For a claimant whose draw assigns deductions, uc_deductions equals allocate_uc_reductions applied to the ungated demand, under any floor.
4. Accounting. For a claimant with an award, uc_deductions + uc_benefit_cap_reduction_after_floor + universal_credit equals the award before the cap.
5. The flag's award. For a claimant whose draw assigns deductions, the flag holds exactly where an award remains after the cap reduction that allocate_uc_reductions applies with no deductions, under any floor.
6. Current law (differential). With no floor, the formula path gives the same flag, latent rate, combination, advance amount, deduction rate, deductions, applied cap and award as origin/main's rule, bit for bit.
7. Floor (differential). Under a floor, the formula path changes the flag only for families the gross cap takes to nil, and only to true. Deductions and the applied cap change only for them. Their award rises by between £0 and the 12p a year that the penny rule keeps.
8. Stored attributes. A dataset that stores the draws, and the formula's rate and combination for every unit the draw assigns (as Microcosm does), gives the formula path's flag, deductions, applied cap and award under any floor.
9. Stored attributes against origin/main (differential). On that dataset, deductions, the applied cap and the award equal origin/main's under current law and under any floor.
10. Incidence reforms on stored rates. A cut in incidence drops the deductions of the units the flag no longer assigns. A rise adds none.

Properties 6, 7 and 9 compare head with MAIN_RULE, which adds back origin/main's flag, rate and advance formulas (as of 7ed52038a; origin/main at 7bcf80b09 has the same deduction code) as a reform. A separate cross-version differential, below, runs the real origin/main tree.

Test plan

• For policy changes: YAML tests whose expected values come from an external source: not applicable. uc_has_deduction and uc_latent_deduction_rate are imputations under gov.simulation, and the protected floor is a reform, zero under current law. The new YAML cases derive their expected values in comments from the 2025-26 standard allowance for a single claimant aged 25 or over, £400.14 a month.
• uvx ruff@0.17.2 format --check and uvx ruff@0.17.2 check on the eight changed Python files, uvx ruff@0.17.2 check --select F811,F821 policyengine_uk, and git diff --check: all clean.
• Changelog fragment changelog.d/2739.fixed.md.

Results at head e17612ec3, each file or node-id group run alone with -n 0:

Tests	Head	origin/main (7bcf80b09) with the new tests
test_uc_deduction_flag_properties.py (new, at the final head and on 02b380c1a)	10 passed	4 failed, 6 passed (3 compare head's rule with MAIN_RULE, and 3 cover rules origin/main already follows)
uc_deductions.yaml (14 cases, 9 new) and uc_fixed_deductions.yaml (11)	25 passed	uc_deductions.yaml: 3 failed, 11 passed. The 3 are the supplied rate alone, the supplied rate under a floor without the flag, and the floor-flagged family. uc_fixed_deductions.yaml: 11 passed.
test_uc_deductions.py	24 passed
test_uc_advance_repayment_properties.py	8 passed
test_uc_tax_free_childcare_choice.py	20 passed
test_data_built_imputations.py	9 passed
test_uc_rebalancing.py -k deductions	2 passed
test_dataframe_dataset.py::test_a_frame_over_several_years_exports_the_same_frame_again, which lists the formulas that read the deduction draws	1 passed
YAML baseline/finance/benefit/family/universal_credit/	569 passed
YAML that reads deductions elsewhere (integration/uc_disabled_child_addition.yaml, baseline/gov/dwp/benefit_cap/, benefit_cap_by_scheme.yaml, the HB UC passport, CTR pensioners)	166 passed
test_benefit_cap_lha_scheme_split_properties.py and test_benefit_cap_and_ctr_pension_age_properties.py	2 of 7 and 1 of 18 passed, none failed, before the 25-minute cap stopped each run. Both build household situations with no deduction inputs, incidence draws or floor, so the flag and the latent rate are false and zero there on both sides.

The universal_credit/ YAML directory ran at d143bcf77. Head's model code is the same, and uc_deductions.yaml, the only YAML file changed since, passes at head.

Cross-version differential. One hand-built dataset of 400 single-adult benefit units (seeded, all 13 regions, awards up to £20,000, gross cap shares from 0 to 2, about 85% claiming) ran under the origin/main tree and under head. It compares 13 variables in six variants:

Variant	origin/main	Head
Formula path, current law	84 flagged, 84 with deductions, £47,699.62	bit-equal on all 13 variables
Stored rates (Microcosm-style), current law	£47,699.62; 0 deductions without the flag	deductions, applied cap, award and flag bit-equal. The deduction rate falls to 0 for 93 units with a stored rate but no flag, none of which has deductions on either side.
Supplied rate of 20% for every unit, current law	103 units have £69,486.08 of deductions without the flag	0 units; deductions only for the 84 flagged units
Formula path, 85% floor	84 flagged, £47,546.53	The flag marks 50 more units, each a family the cap takes to nil. £25,720.00 moves from the applied cap to deductions; universal_credit stays the same on all 400 units.
Stored rates, 85% floor	50 units have £25,720.00 of deductions without the flag	the same deductions, applied cap and award, bit-equal; those 50 units now carry the flag
Supplied rate of 20%, 85% floor	229 units have £162,545.28 of deductions without the flag	0 units

Mutations. Seven mutations of the fix, each in a scratch copy, run against uc_deductions.yaml and the property module (-x):

Mutation	uc_deductions.yaml	Property module
M1: uc_deduction_rate reads the ungated latent rate	1 case fails	fails (property 1)
M2: the advance estimate reads the ungated latent rate	2 cases fail	fails (property 1)
M3: the flag reads the award after the gross cap, as on origin/main	1 case fails	fails (property 3; run alone, property 9 fails too)
M4: the above-cap excess reads the ungated latent rate	1 case fails	fails (property 1)
M5: under any floor the flag ignores the cap	1 case fails	fails (property 5)
M6: both allocator callers gate demand on the flag or an advance, so a supplied rate stops bypassing the flag	passes	fails (test_a_supplied_deduction_rate_applies_whatever_the_flag_says)
M7: the flag compares draw <= incidence	passes	fails (test_a_draw_equal_to_the_incidence_assigns_no_deductions)

M1 to M4 ran against the property module at d98c5b7f4, before property 5 existed. M5 ran against the module at e17612ec3, and M6 and M7 against the final head's three explicit tests.

Overlap.

• Autumn Budget 2026 measures in current law #2719 (ab26-autumn-budget-2026) touches none of these files.
• Project the minimum wage rates by the OBR's national living wage forecast #2700, Project household energy spending with retail energy price indices, not CPI #2727, Charge higher-stake machines at the Machine Games Duty higher rate from April 2027 #2731 and No Council Tax Rebate in Northern Ireland; add its £200 Alternative Fuel Payment #2735 touch none of these files either. Apply Housing Benefit accommodation disregards from their start date #2234 has merged and shares none.
• Report the benefit cap reduction actually applied to Universal Credit #2647 (open) also edits docs/book/validation/uc-deductions.md and test_uc_deductions.py, in different hunks. git merge-tree merges it with this branch cleanly. On the merged tree, uc_deductions.yaml and baseline/gov/dwp/benefit_cap/ pass (138), and so do Report the benefit cap reduction actually applied to Universal Credit #2647's test_benefit_cap_reduction_applied_properties.py tests: its four example tests pass, and its main property test passes all five of its explicit examples through its own check_invariants. That test's 12 generated examples did not finish inside the 25-minute cap. This PR's property module passes there too (7 passed). Report the benefit cap reduction actually applied to Universal Credit #2647's EXAMPLE_UNITS[5] is the issue's example: the cap takes its whole £1,000 award. Under an 85% floor, Report the benefit cap reduction actually applied to Universal Credit #2647 alone (c98c879a7) gives it £720.25 of deductions with the flag false. The merge gives the same £720.25 with the flag true. Under current law both give £0 of deductions, a false flag and an applied cap of £1,000.

Reproducer

Reproducer: policyengine_uk/tests/test_uc_deduction_flag_properties.py::test_the_issue_example_takes_no_deductions_without_the_flag

axiom: n/a: uc_has_deduction and uc_latent_deduction_rate are imputations under gov.simulation, not law; the protected floor is JRF's proposal, zero under current law.

🤖 Generated with Claude Code

[github-actions]

Aggregate impact on certified data: pass

Base 02b380c1a8 against head 4101222293, 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: 0 (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

None.

Spending by benefit and service

Measure	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
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
Disabled Students' Allowance	suppressed	suppressed	suppressed	suppressed	suppressed	suppressed	suppressed

Standard reform costings (change in gov_balance)

Measure	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
Raise additional rate by 3pp	0	0	0	0	0	suppressed	suppressed

Standard reforms: change in each reform's target

Measure	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
Raise additional rate by 3pp: change in income_tax	0	0	0	0	0	suppressed	suppressed

Household net income by decile

No household's net income changes in any year.

No change in any year: receipts by tax head; government balance, each component counted once; model totals; household income totals; population; poverty rates; people in poverty; inequality; mean household net income in each side's own deciles.

Checks failing on both base and head (1)

• VAT excluding private school fees is never negative (sign:vat): 2025-26: 76 units below zero, a weighted £-53,888,684 in total; 2026-27: 76 units below zero, a weighted £-55,774,885 in total; 2027-28: 76 units below zero, a weighted £-57,687,092 in total

Counted-once check

Each of 91 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.

• widowed_parents_allowance: pension_credit responds only through other heads in fewer than 10 households (other heads that moved there: carers_allowance; gov_spending; not a failure)
• widowed_parents_allowance: pension_credit responds only through other heads in fewer than 10 households (other heads that moved there: carers_allowance; household_benefits; not a failure)

Provenance

Side	Commit	Runtime	Environment hash	Partition hash	Time
base	main 02b380c1a8	uk 2.168.1 (files d9e9197f1d2e), core 3.33.12, py 3.13.18 aarch64	843ff5e63f27	e90ddaeead60	1991.55s
head	#2760 merged into main 4101222293	uk 2.168.1 (files dee3bef6c20f), core 3.33.12, py 3.13.18 aarch64	843ff5e63f27	e90ddaeead60	1992.15s

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
Final charge on cash interest in non-cash ISAs	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Lifetime ISA withdrawal charge	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Income tax	£294.46bn	£315.23bn	£334.00bn	£349.45bn	£365.10bn	£383.16bn	£397.71bn
National Insurance (employee and self-employed)	£51.70bn	£54.14bn	£56.13bn	£57.73bn	£59.76bn	£61.64bn	£63.51bn
National Insurance (employer)	£148.71bn	£155.37bn	£160.88bn	£165.09bn	£172.06bn	£177.36bn	£182.57bn
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	£12.60bn	£13.15bn	£13.60bn	£14.11bn	£14.67bn	£15.24bn	£15.80bn
Student loan repayments	£7.82bn	£8.13bn	£8.39bn	£8.58bn	£8.79bn	£9.04bn	£9.29bn
VAT excluding private school fees	£249.37bn	£256.88bn	£266.66bn	£272.70bn	£278.97bn	£285.24bn	£291.59bn
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	£1.95bn	£2.01bn	£2.08bn	£2.14bn	£2.20bn	£2.26bn	£2.31bn
Change in private school VAT from its baseline	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Fuel duties	£24.71bn	£24.59bn	£26.54bn	£26.58bn	£26.26bn	£25.53bn	£24.40bn
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
Betting and gaming duties	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
TV licence fee	£4.26bn	£4.40bn	£4.41bn	£4.42bn	£4.43bn	£4.44bn	£4.45bn
Council tax	£49.21bn	£52.16bn	£54.89bn	£57.95bn	£61.16bn	£64.47bn	£67.91bn
High value council tax surcharge	£0.00bn	£0.00bn	£0.00bn	£0.48bn	£0.49bn	£0.50bn	£0.51bn
Northern Ireland domestic rates	£0.55bn	£0.58bn	£0.60bn	£0.63bn	£0.66bn	£0.69bn	£0.72bn
Business rates	£34.68bn	£36.20bn	£38.00bn	£39.46bn	£42.27bn	£43.25bn	£44.29bn
Stamp duty land tax on the household's own purchases	£6.88bn	£7.32bn	£7.66bn	£8.06bn	£8.47bn	£8.91bn	£9.35bn
Stamp duty land tax paid by companies	£4.72bn	£4.57bn	£5.29bn	£6.03bn	£6.37bn	£6.92bn	£7.45bn
Land transaction tax (Wales)	£0.07bn	£0.08bn	£0.08bn	£0.09bn	£0.10bn	£0.10bn	£0.11bn
Land and buildings transaction tax (Scotland)	£0.31bn	£0.32bn	£0.33bn	£0.35bn	£0.36bn	£0.38bn	£0.40bn
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
Lifetime ISA bonus	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
State Pension	£121.68bn	£125.92bn	£126.73bn	£129.50bn	£132.99bn	£136.66bn	£140.43bn
Pension Credit	£6.66bn	£7.03bn	£7.30bn	£7.51bn	£7.65bn	£7.84bn	£8.03bn
Winter Fuel Payment	£1.86bn	£1.85bn	£1.79bn	£1.77bn	£1.78bn	£1.78bn	£1.78bn
Pension Age Winter Heating Payment (Scotland)	£0.19bn	£0.20bn	£0.20bn	£0.21bn	£0.21bn	£0.22bn	£0.22bn
Universal Credit	£75.48bn	£80.52bn	£82.95bn	£84.96bn	£86.11bn	£87.64bn	£88.27bn
Housing Benefit	£8.56bn	£8.89bn	£9.24bn	£9.48bn	£9.72bn	£9.99bn	£10.27bn
Council Tax Reduction	£2.07bn	£2.20bn	£2.31bn	£2.45bn	£2.58bn	£2.72bn	£2.86bn
Employment and Support Allowance (income-related)	£0.79bn	£0.82bn	£0.84bn	£0.86bn	£0.88bn	£0.90bn	£0.92bn
Employment and Support Allowance (contribution-based)	£5.20bn	£5.37bn	£5.56bn	£5.69bn	£5.82bn	£5.95bn	£6.09bn
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	£0.31bn	£0.31bn	£0.32bn	£0.33bn	£0.34bn
Income Support	£0.11bn	£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	£26.95bn	£28.03bn	£29.05bn	£30.09bn	£30.75bn	£31.51bn	£32.21bn
Disability Living Allowance	£7.49bn	£7.79bn	£8.07bn	£8.36bn	£8.55bn	£8.76bn	£8.95bn
Attendance Allowance	£8.68bn	£9.03bn	£9.36bn	£9.69bn	£9.90bn	£10.15bn	£10.38bn
Carer's Allowance	£4.48bn	£4.66bn	£4.83bn	£5.00bn	£5.11bn	£5.24bn	£5.36bn
Carer Support Payment (Scotland)	£0.31bn	£0.32bn	£0.33bn	£0.34bn	£0.35bn	£0.36bn	£0.37bn
Carer's Allowance Supplement (Scotland)	£0.00bn	£0.04bn	£0.04bn	£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	£0.50bn	£0.52bn	£0.54bn	£0.55bn	£0.56bn	£0.58bn	£0.59bn
Armed Forces Compensation Scheme	£0.61bn	£0.63bn	£0.65bn	£0.66bn	£0.68bn	£0.69bn	£0.71bn
War Widow's or Widower's Pension	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Child Benefit	£16.19bn	£16.82bn	£17.39bn	£18.00bn	£18.39bn	£18.84bn	£19.25bn
Scottish Child Payment	£0.49bn	£0.52bn	£0.53bn	£0.55bn	£0.56bn	£0.57bn	£0.56bn
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	£3.30bn	£3.41bn	£3.54bn	£3.62bn	£3.70bn	£3.78bn	£3.87bn
Statutory Paternity Pay	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Statutory Sick Pay	£1.12bn	£1.16bn	£1.20bn	£1.23bn	£1.26bn	£1.29bn	£1.32bn
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	£0.71bn	£0.73bn	£0.75bn	£0.76bn	£0.78bn
Widowed Parent's Allowance	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn	£0.00bn
Tax-Free Childcare	£0.56bn	£0.57bn	£0.57bn	£0.58bn	£0.60bn	£0.61bn	£0.59bn
Extended childcare entitlement	£2.99bn	£3.50bn	£3.59bn	£3.71bn	£3.78bn	£3.86bn	£3.93bn
Universal childcare entitlement	£2.06bn	£2.22bn	£2.29bn	£2.37bn	£2.43bn	£2.48bn	£2.53bn
Targeted childcare entitlement	£0.50bn	£0.51bn	£0.52bn	£0.54bn	£0.55bn	£0.57bn	£0.56bn
Childcare Offer for Wales	£0.26bn	£0.28bn	£0.28bn	£0.29bn	£0.30bn	£0.31bn	£0.32bn
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	£203.89bn	£204.30bn	£204.56bn	£204.91bn	£205.34bn	£205.85bn	£206.35bn
State education spending	£0.02bn	£0.02bn	£0.02bn	£0.02bn	£0.02bn	£0.02bn	£0.02bn
Transport subsidy spending	£25.05bn	£25.10bn	£25.14bn	£25.18bn	£25.23bn	£25.30bn	£25.36bn
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
Lifetime ISA bonus	0k	0k	0k	0k	0k	0k	0k
State Pension	11,264k	11,145k	10,819k	10,700k	10,723k	10,750k	10,776k
Pension Credit	1,486k	1,480k	1,474k	1,455k	1,453k	1,455k	1,464k
Winter Fuel Payment	7,844k	7,783k	7,473k	7,375k	7,391k	7,409k	7,427k
Pension Age Winter Heating Payment (Scotland)	803k	802k	800k	797k	799k	801k	802k
Universal Credit	6,342k	6,347k	6,336k	6,297k	6,292k	6,271k	6,223k
Housing Benefit	1,249k	1,245k	1,246k	1,229k	1,229k	1,229k	1,232k
Council Tax Reduction	3,176k	3,195k	3,200k	3,215k	3,224k	3,235k	3,242k
Employment and Support Allowance (income-related)	71k	71k	71k	71k	71k	71k	71k
Employment and Support Allowance (contribution-based)	719k	720k	721k	722k	724k	726k	728k
Jobseeker's Allowance (income-based)	0k	0k	0k	0k	0k	0k	0k
Jobseeker's Allowance (contribution-based)	67k	67k	67k	67k	67k	68k	68k
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	3,567k	3,575k	3,579k	3,585k	3,593k	3,602k	3,611k
Disability Living Allowance	1,291k	1,294k	1,296k	1,298k	1,300k	1,304k	1,307k
Attendance Allowance	1,695k	1,698k	1,700k	1,703k	1,707k	1,711k	1,715k
Carer's Allowance	1,034k	1,037k	1,038k	1,040k	1,042k	1,044k	1,047k
Carer Support Payment (Scotland)	71k	71k	71k	72k	72k	72k	72k
Carer's Allowance Supplement (Scotland)	0k	71k	71k	72k	72k	72k	72k
Severe Disablement Allowance	4k	4k	4k	4k	4k	4k	4k
Industrial Injuries Disablement Benefit	137k	137k	137k	138k	138k	138k	139k
Armed Forces Compensation Scheme	93k	93k	94k	94k	94k	94k	94k
War Widow's or Widower's Pension	0k	0k	0k	0k	0k	0k	0k
Child Benefit	8,123k	8,120k	8,120k	8,130k	8,145k	8,161k	8,178k
Scottish Child Payment	351k	352k	352k	353k	350k	348k	337k
Two Child Limit Payment (Scotland, counterfactual)	0k	0k	0k	0k	0k	0k	0k
Healthy Start vouchers	200k	200k	200k	201k	201k	201k	202k
Maternity Allowance	0k	0k	0k	0k	0k	0k	0k
Statutory Maternity Pay	333k	333k	334k	334k	335k	336k	337k
Statutory Paternity Pay	0k	0k	0k	0k	0k	0k	0k
Statutory Sick Pay	181k	182k	182k	182k	182k	183k	183k
Sure Start Maternity Grant	26k	26k	26k	26k	26k	26k	26k
Bereavement Support Payment	98k	98k	98k	98k	98k	99k	99k
Widowed Parent's Allowance	0k	0k	0k	0k	0k	0k	0k
Tax-Free Childcare	1,043k	1,027k	1,014k	1,009k	1,011k	1,009k	993k
Extended childcare entitlement	795k	800k	796k	797k	798k	798k	792k
Universal childcare entitlement	1,071k	1,072k	1,072k	1,073k	1,076k	1,079k	1,074k
Targeted childcare entitlement	165k	156k	154k	154k	155k	155k	150k
Childcare Offer for Wales	39k	39k	39k	39k	39k	39k	39k
Care to Learn	0k	0k	0k	0k	0k	0k	0k
Childcare Grant	0k	0k	0k	0k	0k	0k	0k
Parents' Learning Allowance	98k	98k	98k	99k	99k	99k	99k
Adult Dependants' Grant	18k	18k	12k	12k	12k	12k	12k
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	£892.00bn	£935.14bn	£979.55bn	£1,013.84bn	£1,052.13bn	£1,089.13bn	£1,122.37bn
Government spending	£529.38bn †	£543.55bn †	£550.80bn †	£559.56bn †	£567.27bn †	£575.95bn †	£583.61bn †
Government balance, each receipt once	£362.62bn †	£391.59bn †	£428.75bn †	£454.28bn †	£484.86bn †	£513.17bn †	£538.76bn †
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	£892.00bn	£935.14bn	£979.55bn	£1,013.84bn	£1,052.13bn	£1,089.13bn	£1,122.37bn
household_tax	£491.97bn	£520.87bn	£549.93bn	£573.92bn	£598.90bn	£624.26bn	£645.90bn
pre_budget_change_household_tax	£484.15bn	£512.74bn	£541.54bn	£564.86bn	£589.61bn	£614.73bn	£636.09bn
gov_spending	£529.38bn †	£543.55bn †	£550.80bn †	£559.56bn †	£567.27bn †	£575.95bn †	£583.61bn †
household_benefits	£529.38bn †	£543.55bn †	£550.80bn †	£559.56bn †	£567.27bn †	£575.95bn †	£583.61bn †
gov_balance	£362.62bn †	£391.59bn †	£428.75bn †	£454.28bn †	£484.86bn †	£513.17bn †	£538.76bn †

Household income totals: head levels

Measure (head)	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
Household market income	£1,637.96bn	£1,702.77bn	£1,757.35bn	£1,806.41bn	£1,855.97bn	£1,912.43bn	£1,970.44bn
Household net income	£1,636.69bn †	£1,685.25bn †	£1,716.76bn †	£1,749.63bn †	£1,780.87bn †	£1,819.46bn †	£1,862.22bn †
Household net income (HBAI definition)	£1,449.57bn	£1,497.73bn	£1,532.72bn	£1,567.06bn	£1,599.82bn	£1,637.79bn	£1,678.91bn

Population: head levels

Measure (head)	2025-26	2026-27	2027-28	2028-29	2029-30	2030-31	2031-32
People	69,245k	69,383k	69,473k	69,592k	69,738k	69,912k	70,080k
Benefit units	35,110k	35,181k	35,226k	35,286k	35,360k	35,449k	35,534k
Households	31,046k	31,108k	31,149k	31,201k	31,267k	31,345k	31,420k

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	16.3%	15.6%	16.4%	16.3%	16.5%	16.5%	16.6%
Absolute poverty, before housing costs: children	24.7%	22.3%	23.3%	22.9%	23.1%	23.2%	23.5%
Absolute poverty, before housing costs: working-age adults	14.1%	13.9%	14.7%	14.7%	14.8%	14.8%	15.0%
Absolute poverty, before housing costs: pensioners	13.7%	13.5%	14.0%	13.9%	14.0%	13.9%	13.9%
Absolute poverty, after housing costs: everyone	21.6%	21.1%	22.0%	22.6%	22.9%	23.1%	23.4%
Absolute poverty, after housing costs: children	33.3%	31.3%	32.2%	32.5%	32.8%	33.4%	34.2%
Absolute poverty, after housing costs: working-age adults	19.9%	19.9%	20.8%	21.6%	21.9%	22.0%	22.3%
Absolute poverty, after housing costs: pensioners	12.7%	12.6%	13.1%	13.2%	13.3%	13.4%	13.6%
Relative poverty, before housing costs: everyone	17.0%	16.3%	16.4%	16.3%	16.3%	16.3%	16.7%
Relative poverty, before housing costs: children	25.9%	23.4%	23.3%	22.9%	22.8%	22.9%	23.7%
Relative poverty, before housing costs: working-age adults	14.5%	14.3%	14.6%	14.7%	14.7%	14.7%	15.0%
Relative poverty, before housing costs: pensioners	14.5%	14.7%	13.9%	13.9%	13.8%	13.9%	14.0%
Relative poverty, after housing costs: everyone	21.4%	21.0%	21.2%	21.3%	21.3%	21.5%	21.7%
Relative poverty, after housing costs: children	33.1%	31.1%	31.1%	31.0%	31.1%	31.2%	31.8%
Relative poverty, after housing costs: working-age adults	19.9%	19.8%	20.2%	20.4%	20.5%	20.6%	20.8%
Relative poverty, after housing costs: pensioners	12.5%	12.4%	12.2%	11.7%	11.7%	11.8%	12.0%

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	11,278k	10,837k	11,403k	11,374k	11,484k	11,512k	11,651k
Absolute poverty, before housing costs: children	3,688k	3,332k	3,496k	3,445k	3,480k	3,502k	3,549k
Absolute poverty, before housing costs: working-age adults	5,965k	5,921k	6,308k	6,362k	6,420k	6,429k	6,521k
Absolute poverty, before housing costs: pensioners	1,624k	1,584k	1,599k	1,568k	1,583k	1,580k	1,581k
Absolute poverty, after housing costs: everyone	14,944k	14,662k	15,304k	15,720k	15,939k	16,138k	16,423k
Absolute poverty, after housing costs: children	4,975k	4,689k	4,835k	4,887k	4,944k	5,039k	5,178k
Absolute poverty, after housing costs: working-age adults	8,463k	8,491k	8,969k	9,343k	9,491k	9,582k	9,703k
Absolute poverty, after housing costs: pensioners	1,506k	1,482k	1,500k	1,491k	1,505k	1,517k	1,542k
Relative poverty, before housing costs: everyone	11,750k	11,332k	11,389k	11,359k	11,364k	11,416k	11,711k
Relative poverty, before housing costs: children	3,872k	3,504k	3,496k	3,440k	3,434k	3,454k	3,582k
Relative poverty, before housing costs: working-age adults	6,159k	6,103k	6,301k	6,355k	6,366k	6,391k	6,544k
Relative poverty, before housing costs: pensioners	1,720k	1,724k	1,592k	1,563k	1,563k	1,571k	1,585k
Relative poverty, after housing costs: everyone	14,849k	14,583k	14,728k	14,809k	14,885k	15,018k	15,234k
Relative poverty, after housing costs: children	4,942k	4,664k	4,660k	4,663k	4,681k	4,709k	4,806k
Relative poverty, after housing costs: working-age adults	8,426k	8,460k	8,679k	8,821k	8,877k	8,970k	9,062k
Relative poverty, after housing costs: pensioners	1,482k	1,459k	1,389k	1,325k	1,327k	1,340k	1,366k

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	0.3080	0.3057	0.3064	0.3063	0.3069	0.3075	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	£17,681 †	£17,895 †	£17,899 †	£18,153 †	£18,306 †	£18,543 †	£18,727 †
Decile 2: mean household_net_income per household	£27,939 †	£28,874 †	£28,675 †	£29,031 †	£29,318 †	£29,702 †	£30,162 †
Decile 3: mean household_net_income per household	£34,320 †	£35,455 †	£36,083 †	£36,591 †	£37,213 †	£37,742 †	£38,188 †
Decile 4: mean household_net_income per household	£38,933 †	£40,603 †	£41,867 †	£42,782 †	£43,367 †	£43,818 †	£44,447 †
Decile 5: mean household_net_income per household	£43,239 †	£45,442 †	£45,782 †	£47,007 †	£47,727 †	£48,901 †	£50,212 †
Decile 6: mean household_net_income per household	£47,927 †	£49,126 †	£50,886 †	£51,693 †	£52,584 †	£54,196 †	£55,183 †
Decile 7: mean household_net_income per household	£55,662 †	£56,509 †	£57,442 †	£57,963 †	£59,080 †	£59,209 †	£60,671 †
Decile 8: mean household_net_income per household	£68,789 †	£70,704 †	£71,778 †	£73,355 †	£73,950 †	£75,359 †	£77,245 †
Decile 9: mean household_net_income per household	£78,890 †	£80,992 †	£82,907 †	£84,246 †	£85,584 †	£87,170 †	£89,598 †
Decile 10: mean household_net_income per household	£117,005 †	£120,262 †	£122,221 †	£124,681 †	£126,774 †	£129,108 †	£131,486 †

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	£6.41bn	£6.66bn	£6.64bn	£6.86bn	£7.04bn	£7.25bn	£7.49bn
Raise higher rate by 1pp	£3.61bn	£3.87bn	£4.00bn	£4.21bn	£4.44bn	£4.71bn	£4.83bn
Raise personal allowance by ~800GBP/year	£-3.80bn	£-3.92bn	£-3.98bn	£-4.10bn	£-4.18bn	£-4.21bn	£-1.94bn
Raise child benefit by 25GBP/week per additional child	£-1.99bn	£-1.75bn	£-1.55bn	£-1.39bn	£-1.30bn	£-1.18bn	£-1.07bn
Reduce Universal Credit taper rate to 20%	£-20.77bn	£-21.32bn	£-21.80bn	£-22.04bn	£-22.40bn	£-22.80bn	£-22.99bn
Raise Class 1 main employee NICs rate to 10%	£10.89bn	£11.30bn	£11.71bn	£12.01bn	£12.31bn	£12.62bn	£13.00bn
Raise VAT standard rate by 2pp	£24.89bn	£25.71bn	£26.63bn	£27.24bn	£27.87bn	£28.50bn	£29.14bn
Raise additional rate by 3pp	£2.90bn	£3.15bn	£3.22bn	£3.42bn	£3.61bn	suppressed	suppressed
Raise the Universal Credit standard allowance by 10%	£-3.06bn	£-3.18bn	£-3.26bn	£-3.35bn	£-3.44bn	£-3.49bn	£-3.50bn
Raise the State Pension by 10%	£-7.78bn	£-8.01bn	£-7.99bn	£-8.14bn	£-8.42bn	£-8.55bn	£-8.89bn

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	£6.55bn	£6.86bn	£6.80bn	£7.01bn	£7.21bn	£7.44bn	£7.66bn
Raise higher rate by 1pp: change in income_tax	£3.61bn	£3.92bn	£4.01bn	£4.23bn	£4.45bn	£4.72bn	£4.84bn
Raise personal allowance by ~800GBP/year: change in income_tax	£-3.93bn	£-4.07bn	£-4.16bn	£-4.25bn	£-4.32bn	£-4.38bn	£-1.75bn
Raise child benefit by 25GBP/week per additional child: change in child_benefit	£2.33bn	£2.14bn	£1.94bn	£1.76bn	£1.65bn	£1.52bn	£1.40bn
Reduce Universal Credit taper rate to 20%: change in universal_credit	£20.74bn	£21.31bn	£21.79bn	£22.05bn	£22.37bn	£22.78bn	£22.99bn
Raise Class 1 main employee NICs rate to 10%: change in national_insurance	£11.15bn	£11.63bn	£12.00bn	£12.29bn	£12.61bn	£12.94bn	£13.31bn
Raise VAT standard rate by 2pp: change in vat	£24.69bn	£25.51bn	£26.42bn	£27.03bn	£27.65bn	£28.28bn	£28.91bn
Raise additional rate by 3pp: change in income_tax	£2.90bn	£3.15bn	£3.22bn	£3.42bn	£3.62bn	suppressed	suppressed
Raise the Universal Credit standard allowance by 10%: change in universal_credit	£3.06bn	£3.19bn	£3.28bn	£3.37bn	£3.43bn	£3.49bn	£3.51bn
Raise the State Pension by 10%: change in state_pension	£10.68bn	£11.17bn	£11.28bn	£11.60bn	£12.04bn	£12.47bn	£12.97bn