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Documentation of APW calculations for Great Britain, 1997
Single APW:
The wage income is the provisional figure for 1997 from Inland Revenue.
1997
Insured
1)
Gross wage
16,700 GBP
Tax and social security
4,200 GBP
2)
Disposable income
12,500 GBP
APW-couple: The husband has the same wage as the single APW, the wife has 50 per
cent of that. The couple has no children.
1997
Insured
1)
Gross wage
25,050 GBP
Tax and social security
5,369 GBP
Disposable income
19,681 GBP
1)
Unemployment insurance is mandatory in Great Britain.
2)
Cf. the annex for a documentation.
The benefit rates are usually changed around April 1st in Great Britain. That means, that
weighted average rates should be used for calculations covering the calendar year. An
alternative interpretation is that the year for Britain runs from the second quarter this year
to the second quarter next year. It is this alternative interpretation which has been applied
in the calculations presented in the following, and this is also how the APW calculations
for Britain are made in OECD’s publication ’The Tax/Benefit Position of Employees'.
When the wage level projection is performed it is the development in the average wage
level for the second quarter 1996 until the second quarter 1997 to the estimated average
wage level for the second quarter 1997 until the second quarter 1998 which is used.

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’Standard’ income events
1.
Ill for one week. Single APW 
The gross wage is reduced by 1/52, that is by 321 GBP. The maximum rate for
compensation for illness in one week is 55.70 GBP (the rate for Statutory Sick Pay,
SSP, in 1997 for weekly gross wages above 62 GBP. SSP can be paid for max. 28
weeks). The working week is 5 days and there is a waiting period of 3 days during
the first week of illness. The compensation for the first week of illness will then be
22.28 GBP (2/5 x 55.70).
The employer can pay Occupational Sick Pay (OSP) as a supplement, cf. later.
The gross compensation percentage is 22.28 / 321 x 100 = 6.9. The disposable
income of the APW is 12,297 GBP, when he or she is ill for one week during 1997.
The decrease in disposable income compared to the situation without illness is
12,500 - 12,297 = 203 GBP or 1.6 per cent.
Many British workers receive a supplement (OSP) to the SSP-benefit, when they are
ill. The variation in OSP-payments is considerable (it is a labour market agreement).
A net compensation percentage of 80 is quite usual. For that coverage the decrease
in disposable income is approx. 0.4 per cent.