Press release

Low Pay Commission consultation on the accommodation offset

The offset is the only benefit-in-kind that can count towards payment of the National Minimum Wage (NMW). It is currently set at a daily limit…

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The offset is the only benefit-in-kind that can count towards payment of the National Minimum Wage (NMW). It is currently set at a daily limit of £4.73 (£33.11 a week) and its purpose is to act as a protective measure, to discourage employers both from levying excessive accommodation charges and from withdrawing from the provision of accommodation.

The provision of accommodation to workers is widespread in some sectors, for example agriculture and hospitality. The Commission would like to hear both from workers who have accommodation provided for them, and from those employers who provide accommodation to their workers, to gain an understanding of how far the offset has protected low-paid workers since it was introduced and also to see if there is any evidence that the level of the offset has deprived workers of accommodation that would otherwise be offered.

The consultation can be found at


The deadline for responding to this consultation is 10 September 2012. This consultation is separate to the consultation launched in June, seeking views on wider aspects of the NMW.

**Notes to Editors

**1. The Low Pay Commission is a statutory body whose role is to advise the Government on the National Minimum Wage. Each February it submits a report making recommendations as to what the NMW rates should be. Information on how the Commission undertakes its activities can be found at

  1. The Commission has produced thirteen reports. These are available from the Stationery Office Bookshops or the Commission’s website at:

  2. The members of the Low Pay Commission are: David Norgrove (Chair), Chair of PensionsFirst and Deputy Chairman of the British Museum; Susan Anderson, consultant to the CBI on employment issues and a member of Acas Council; Professor Bob Elliott, Professor of Economics and Director of the Health Economics Research Unit at the University of Aberdeen; Neil Goulden, Director, Neil Goulden Consulting Ltd; John Hannett, General Secretary of the Union of Shop, Distributive and Allied Workers; Peter Donaldson, Managing Director of D5 Consulting Ltd; Professor Stephen Machin, Professor of Economics at University College London and Research Director, Centre for Economic Performance, London School of Economics; Frances O’Grady, TUC Deputy General Secretary; and Heather Wakefield, National Secretary for UNISON’s Local Government Service Group.

  3. The Government provided the Commission with its remit on 14 June. The remit asked the Commission to:

  • Monitor, evaluate and review the levels of each of the different NMW rates and make recommendations on the levels it believes should apply from October 2013.
  • Review the contribution the NMW could make to the employment prospects of young people, including those in apprenticeships. As part of this review, the LPC is asked to consider the implications of the introduction of the Raising of the Participation Age in England on the youth rates and the apprentice rate.
  • Review the accommodation offset.
  • Evaluate the regulations for salaried hours workers and consider whether there are any measures that the Government could take to ensure that it is as simple and easy as possible for employers to make sure they are paying at least the NMW and for individuals to be confident that they are being paid at least the NMW.

In evaluating and making recommendations in the areas set out above, the LPC is asked to take account of the state of the economy and employment and unemployment levels. There is also the wider policy context to consider, including pensions’ reform, the introduction of universal credit, the raising of the personal tax allowance, any implications of the proposed abolition of the Agricultural Wages Board for England and Wales (pending the outcome of the legislative process), and other Government reforms that may affect the NMW.

The LPC is asked to report to the Prime Minister, Deputy Prime Minister, and the Secretary of State for Business, Innovation and Skills by the end of February 2013.

  1. The National Minimum Wage for those aged 21 and over is £6.08 per hour. For those aged 18 to 20 the rate is £4.98 per hour. The minimum wage for 16 and 17 year olds is £3.68 an hour. The Apprentice Minimum Wage is £2.60 per hour for those aged under 19 or in the first year of their apprenticeship. The Government has accepted the Commission’s 2012 recommendation that the adult and Apprentice Rates should increase to £6.19 and £2.65 respectively from 1 October, and that the other two rates should remain unchanged.

Low Pay Commission
6th Floor
Victoria House
Southampton Row
Tel. 020 7271 0451**

Notes to Editors

Contact Information

Name BIS Press Office Job Title

Division Department for Business, Innovation & Skills Phone




Published 25 July 2012