Social Security Department: Minister’s Report 2017

Minister's Report 2017

Social Security Department

MINISTER  

Judy Martin

Deputy of St. Helier No. 1

ASSISTANT MINISTER Geoffrey Southern Deputy of St. Helier No. 2

ASSISTANT MINISTER Jeremy Maçon

Deputy of St. Saviour No. 1

CHIEF OFFICER Ian Burns

Presented to the States by the Minister for Social Security.

Contents

Section 1 – Minister's Report ...................................................................................... 5

Minister's Foreword.................................................................................................................................. 5 Social Security – Our strategic aims .......................................................................................................... 6 Executive summary ................................................................................................................................... 7 Who does Social Security Support? ........................................................................................................ 14 Social Security Overview ......................................................................................................................... 16

Section 2 – Fund Income ........................................................................................... 18

Social Security and Health Insurance Contributions ............................................................................... 18 Long-Term Care contributions ................................................................................................................ 21 States Grant to the Social Security Fund ................................................................................................ 21 States Grant to the Long-Term Care Fund .............................................................................................. 22 Fund Investments and Performance....................................................................................................... 22

Section 3 – Social Security Fund Benefits (SSF) .......................................................... 23

SSF – Old Age Pensions (OAP) ................................................................................................................. 23 SSF – Survivor's Benefits and Death Grants ............................................................................................ 27 SSF – Short Term Incapacity Allowance (STIA)........................................................................................ 28 SSF – Long Term Incapacity Allowance (LTIA) and Invalidity Benefit (INV) ............................................ 29 SSF – Maternity and Adoption Benefits .................................................................................................. 31 SSF – Home Carer's Allowance (HCA) ..................................................................................................... 32 SSF – Insolvency Benefit ......................................................................................................................... 32

Section 4 – Health Insurance Fund Benefits (HIF) ....................................................... 33

HIF – Medical Benefits (GP Consultations) ............................................................................................. 33 HIF – Jersey Quality Improvement Framework (JQIF) ............................................................................ 33 HIF – Primary Care Contracts .................................................................................................................. 34 HIF – Pathology Laboratory Benefit ........................................................................................................ 34 HIF – Pharmaceutical Benefit.................................................................................................................. 34 HIF – Gluten-free Scheme ....................................................................................................................... 36

Section 5 – Long-Term Care Fund Benefits (LTCF)....................................................... 37 Section 6 – Tax Funded Services and Benefits ............................................................ 39

Tax Funded Services – Back to Work ...................................................................................................... 39 Tax Funded Services – Jersey Employment Trust ................................................................................... 44 Tax Funded Services – Jersey Advisory and Conciliation Service............................................................ 44 Tax Funded Services – Health and Safety Inspectorate .......................................................................... 45 Tax Funded Benefits – Income Support .................................................................................................. 46 Income Support: Weekly benefit ............................................................................................................ 46 Income Support: Special Payments ........................................................................................................ 61 Income Support: Cold Weather Payments ............................................................................................. 61 Income Support: Ministerial Exceptional Payments ............................................................................... 63 Income Support: Child Personal Care Benefit......................................................................................... 63 Tax Funded Benefits – Christmas Bonus ................................................................................................. 63 Tax Funded Benefits – Food Costs Bonus ............................................................................................... 63 Tax Funded Benefits – Cold Weather Bonus .......................................................................................... 64 Tax Funded Benefits – Pension Plus ....................................................................................................... 65 Tax Funded Benefits – 75+ TV Licence Benefit ....................................................................................... 65 Tax Funded Benefits – Other Benefits .................................................................................................... 66 Departmental Administration Costs ....................................................................................................... 66

Appendix: Summary of legislation approved or amended in 2017 ............................ 67

Section 1 – Minister's Report  

Minister's R

Minister's Foreword

This report reflects the wide range of benefits and services provided by the Social Security Department and provides a comprehensive view of activities undertaken during 2017.

During that period, Deputy Susie Pinel was the Minister for Social Security and I would like to acknowledge the achievements of Deputy Pinel and her Assistant Minister, Deputy Graham Truscott over their term of office.

I would also like to record my thanks to the Chief Officer, Ian Burns, and to the officers at Social Security for all their hard work during 2017.

Following the general election, I was appointed as the Minister for Social Security in June 2018 and I look forward to working with my Assistant Ministers, Deputy Geoff Southern and Deputy Jeremy Maçon over the next four years across this broad range of responsibilities.

Deputy Judy Martin Minister

Social Security – Our strategic aims

to help people to achieve and maintain financial independence;

to provide well-targeted social benefits and support to those unable to fully support themselves;

To deliver excellent customer services.

In 2017, we were responsible for:-

• A compulsory, contributory Social Security insurance scheme that receives contributions from employers, employees and general tax revenues. This scheme is most closely associated with the payment of pensions, but it also provides contributors with many benefits throughout life by offering support from Maternity Allowances through to Death Grants.
• A compulsory, contributory Health Insurance Scheme that receives contributions from employers and employees. This scheme subsidises GP consultation fees and pays for prescriptions issued by GPs and dentists. It also meets the cost of specific primary care services delivered through community pharmacies and general practices.
• A compulsory, contributory Long-Term Care scheme that receives contributions from individuals and general tax revenues. The scheme provides a range of benefits for adults with long-term care needs.
• Non-contributory means-tested benefits including Income Support. These are funded from general tax revenues and provide targeted support for lower income households.
• Back to Work services which help people into work and support adults with barriers to employment to obtain and maintain paid work. The Department funds the Jersey Employment Trust (JET) to provide specialist employment advice, training and support for those with a disability or long-term health condition.
• Employment legislation, which sets out minimum standards for good employment relations and protection in the workplace. The Department funds the Jersey Advisory and Conciliation Service (JACS) to provide advice, training and conciliation.
• Health and Safety legislation providing a legal framework which sets out the duties of employers and employees to observe health, safety and welfare at work, as well as the Health and Safety Inspectorate which provides proactive advice to employers and undertakes investigations when things go wrong.
• Discrimination legislation that ensures people are not treated unfairly due to their race, age, sex, sexual orientation, gender reassignment, pregnancy or maternity. The Department funds the Jersey Advisory and Conciliation Service (JACS) and the Citizens' Advice Jersey to provide advice, training, conciliation and mediation.
• The maintenance of the Names and Addresses Register and the registration of individuals and businesses under the Control of Housing and Work Law on behalf of the Chief Minister.
• The maintenance of the Affordable Housing Gateway on behalf of the Housing Minister.

Executive summary  

2017 was another productive year for the team at Social Security. The breadth of the work undertaken by the  

teams at Social Security means that we have over a thousand customer contacts every working day, whether these  

are face to face, by letter, over the phone or online.  Minister's R

Most of our day to day work involves providing our existing services, making sure that all contact with the department is friendly, prompt and accessible and acting on customer feedback. We were delighted to win the Public Sector category of the Jersey Customer Service Awards in 2017 for the fifth year running.

This report summarises departmental activity over the benefits and services provided. During 2018 much of this data will also be published and kept up to date on the opendata.gov.je website.

Table 1 summarises the activities of the Department in 2017.

Income Support  68.9   5,763 households Long-Term Care  44.6   1,335 claimants Long-term Incapacity Allowance & Invalidity Benefit  22.2   4,686 claims

Short Term Incapacity Allowance  13.8   501,616 days paid Medical Benefits and Jersey Quality Improvement  9.5   338,494 consultations

Framework (GP services)

Survivor's Benefits  4.2   744 claimants Maternity Benefits  3.2   999 parents

Home Carer's Allowance  2.0   176 carers

Christmas Bonus   0.3   3,927 claimants Death Grant  0.6   790 grants

Food Costs Bonus  0.3   1,189 households Pension Plus  0.5   5,777 claims

Gluten Free vouchers  0.5   702 claimants

TV Licence Benefit  0.3   1,730 claimants

HIF Primary Care Contracts (Flu vaccinations)  0.3   16,243 vaccinations Other Benefits (Less than £250,000)  0.5

Actively Seeking Work   2,842 individuals Health & Safety Activity   4,100 enquiries Business Licensing Applications   3,578 applications Control of Housing and Work Registrations   2,885 newly registered

individuals

Total  370.9 Table 1: Summary of 2017 spend on benefits administered by the Department.

Helping customers toward financial independence

At the end of 2017, the number of people actively seeking work had reduced to 950, from a peak in 2013 of over 2000. This encouraging statistic is accompanied by record numbers of workers in employment and a reducing need for income support benefits.

Back to Work continued to offer a range of support to jobseekers, particularly those who are long-term unemployed or under 25 years old. This support includes different employment incentives designed to promote job opportunities in key industries, the expansion of the Foundations programme to include unpaid placements and the re-launching of the Long Term Unemployed scheme.

A pilot project Get Ahead' was set up in 2017 to support customers on income support move towards, achieve and maintain financial independence. Advisors work directly with customers to:

• Increase their income through pay rises or new jobs
• Improve their career prospects through training/development/coaching
• Manage their money better to move them out of the Just About Managing' bracket
• Increase their overall confidence and skills in relation to their finances and career

Helping customers with health costs

The new Pension Plus scheme was launched in January 2017 to deliver support for pensioners on lower incomes to assist with dentistry, chiropody and optical costs. It replaced the previous 65+ Health Plan and the value of benefits payable under the scheme was increased. The new scheme covers:

• Dentistry - £40 towards a check-up each year and up to £700 towards treatment/dentures every two years.
• Chiropody – up to £120 per year.
• Optical - £40 towards an eye test every two years and up to £120 towards eye wear every two years.

The new scheme also removes the burden of the customer having to pay their bill in full and then submit the receipt to get a rebate. Under the new scheme, the customer receives the full value of their benefit at the time of payment.

Pensioners and others have also benefited this year from an improvement in the provision of flu vaccines. Social Security worked closely with the Health and Social Services Department, GPs and community pharmacists to redesign the way flu vaccinations are delivered to people vulnerable to the effects of flu. In the past, vaccination coverage rates were poor in Jersey and the General Hospital suffered additional winter pressures due to flu admissions. The new flu plan' made improvements by targeting vaccinations at the groups who need them, and making it easier for Islanders to access vaccinations. To achieve this Social Security contracted with GPs and pharmacists to provide the vaccination and subsidised the cost of the service for target groups who are most vulnerable to the effects of flu. Islanders were able to drop into pharmacy for their vaccination – with many reporting they found this more convenient. Data shows that our coverage improved, with more vulnerable islanders receiving the vaccination than in previous years.

On the 1st July, the new Flexible Personal Care component was launched for Income Support customers who need a formal care package but do not have care needs that would be covered by the Long Term Care Benefit. The benefit pays towards a care package set up by a care professional or social worker and is paid directly to their care provider. If any customer needs additional help with activities that are an essential part of daily living, they can request a care needs assessment from the Health and Social Services Department and potentially transition onto Long Term Care.

Protection against discrimination  

The discrimination law has now been in force in Jersey since September 2014 and provides protection from race,  

age and sex discrimination. The original decision of the States also required protection against disability  

discrimination. This characteristic is more complicated than the preceding ones and careful preparation was  

undertaken during the year before the draft disability discrimination regulations were published for consultation in  Minister's R September. Stakeholders had the opportunity to discuss the regulations at public meetings and accessible versions

of the consultation were provided, including versions in large/plain print and sign language. The consultation

process led to some useful amendments to the regulations which were finalised and approved in early 2018.

These regulations will be phased in between 2018 and 2020.

Extending the rights of employees

The minimum wage is reviewed each year and in April 2017 it increased to £7.18 per hour. The Employment Forum conducted its review over the summer months and recommended a rate of £7.50 per hour for April 2018 and this rate has been endorsed by the States Assembly. This is an increase of 4.5% which is the largest increase since 2008.

Employment protection for Armed Forces Reservists was introduced on 1 April 2017 (having been approved by the States Assembly in 2016), which gives reservists protection against detriment and dismissal and the right to return to the same (or equivalent) job following the completion of a period of reserve service. These rights are vital to encourage sufficient numbers of people with all types of skills and backgrounds to commit to reserve service. In addition, since 1 April, employees have the right to claim up to 4 weeks' pay as compensation for any breaches of their statutory rights in relation to written terms of employment, uninterrupted rest days and pay slips.

The Employment Forum also undertook a review of family friendly employment rights during 2017 to consider extending the basic rights that were established in 2015. The Forum launched a public consultation and held a series of meetings with stakeholders. The consultation received considerable interest and a recommendation to the Minister was published by the Forum in December. The Forum recommended significant changes to family friendly employment rights to be implemented over a two-year period from 2018-2020. In early 2018, the States Assembly endorsed the first phase of the recommendations which will come into force in September 2018. If approved by States Members, the second phase will be fully in place in September 2019.

Delivering excellent customer services

In 2017, for the fifth year running, a member of staff working in Social Security won the Public Sector category at the Jersey Customer Service Awards in recognition of their excellent customer service.

On 22nd June over sixty stakeholders from third sector, organisations and colleagues from across the States of Jersey attended our annual Income Support information event at the Salvation Army headquarters. These sessions work as a way of explaining the core concepts of Jersey's low-income benefit system to any partners who may have mutual clients, or who just have a working interest in the help available to qualified households in Jersey. The event is run as an interactive format, starting with a short introduction then the attendees rotate through a number of smaller discussion groups dedicated to specific areas of the benefit. These include accommodation, medical benefits (impairment,) job seeking and parents / children / maintenance. This enables general questions to be answered by experts in the individual areas of the benefit, as well as offering the opportunity to network with colleagues from different organisations in the Island. The events are very well received with excellent feedback and are improving understanding of the benefits system to States colleagues and external organisations who come into contact with Social Security. In addition, there were a number of follow-up sessions delivered to individual charities and teams as a result of this session.

Social Security is committed to moving more services online, in order to improve customer access services and to increase efficiency within the States of Jersey. In 2017, a number of online forms were developed. For example, Income Support claimants who are working can now provide their wage information through an online form, saving the customer time and helping the Department to process claims more efficiently.

The Department uses Lean techniques to review operational processes and improve customer service. Projects included the customer-focussed design of new online service processes, improving the efficiency of scanning documents submitted by customers, and streamlining the way that the Income Support clinical costs process operates – among many others. A major project was also initiated to improve the design and processing of sickness certificates.

Providing value for the tax payer

At the year end the Department employed the equivalent of 222.2 full time employees. This is a decrease of 7.4 (3.2%) from 2016. Whilst there have been reductions realised through the Voluntary Release scheme, there are also a number of vacancies open within the Department.

The Department is 3 years into a 5 year programme of £3.5 million of savings. These savings must be recurring and delivered for a full year, and so the Department has worked hard to generate as many savings as possible in advance – this will necessarily generate some underspends in staff and administration in the earlier period. The Department has been managing its budget prudently to ensure it has the agility to react to unexpected funding pressures, such as any shortfall in Population Office fees below the increased levels set by the States in the MTFP, and the potential resource implications of supporting corporate initiatives such as eGov.

The phased implementation of SSD's management information platform continued during the year with Health Zone and Back to Work areas completed. Significant improvements in the Department's ability to access, analyse and act on data held in its business systems are now being achieved.

The current Treasury and Resources Department tax business system is being replaced with a new Revenue Management System (RMS) which will be able to process both tax receipts and social security contributions. The current processes for collecting taxes and contributions can be difficult to understand for businesses and are not joined-up with some customers having to engage with two departments. There is also duplication of effort by the separate departments.

It is planned to move the collection of contributions into the new tax system in 2020. The outcomes of the new system will include:

• Services designed around customer needs
• Transparent easy to understand process
• Modern risk based approach to collecting and administering taxes and contributions
• Efficient use of resources
• Collaborative working

Benefit fraud only represents a small proportion of the Department's overall costs, but it's an area where Social Security continues to pursue improvements and to prosecute offenders. Last year improvements in the On-line Fraud Referral Form improved the quality of information sourced at the first point of capture, reducing rejection rate from 33% in 2016 to 18% in 2017. A total of 712 cases were graded through the UK National Intelligence Model. People who attempt to defraud the Department create costs for the taxpayer and make life difficult for the overwhelming majority of genuine benefit claimants, and so the fraud team focus on uncovering fraud before it starts working with benefit teams. Much of the work of the dedicated fraud team goes on behind the scenes, with interventions that address overpayments and recover money back before expensive court cases are needed.  However, the Department will always aim to bring a prosecution when a significant amount of money is involved.  As a last resort, serious offences can result in a custodial sentence.  

Planning ahead  Minister's R

In January 2017, the three-year actuarial review of the Social Security Fund was published. This confirmed the strong position of the Fund and its accompanying Reserve Fund. Contribution income has exceeded expectations over the last three year period, principally due to ongoing levels of immigration, and investment returns which have been very positive. At the end of the year, the total assets of the Fund stood at nearly £1.8 billion.

However, despite reporting on a currently healthy Reserve Fund, the actuarial review also clearly demonstrates the need for the ongoing major review of the Social Security scheme. The number of people aged 65 and above is due to rise by 65% between 2015 and 2035. Even with an increase in state pension age, the extra annual cost to be met in pension payments by 2035 is roughly £100 million (in 2015 prices).

Acknowledging these future challenges, the Department is undertaking a major review of the Social Security Scheme. The first part of the scheme review was a public consultation during 2016 and these results were published in May 2017. That consultation had over 1,300 replies and there was clear support for the old age pension to be maintained in its current form. There was little support for a means tested pension or for the value to be reduced in the future. Respondents understood the pressure that the cost of pensions will put on the Fund and agreed that savings could be made in other benefit areas and that contributions may need to rise. The consultation also explored how well prepared people were for supporting themselves financially in old age. Many people reported that they had made little or no provision for this and were supportive of the government providing extra support, perhaps through a compulsory workplace pension scheme.

At the end of September 2017 a second consultation was issued, this time focusing on parental and bereavement benefits. These benefits were designed in the 1970s and there have been major changes to society since then. This consultation took advantage of modern technology and included a survey run through Facebook. Over 2,600 people gave their views, which were published in March 2018.

Sustainable funding

The net asset value of all four ring-fenced funds at the end of 2017 was just over £1.97 billion, split across four main funds as indicated in Table 2. This build-up of reserves is a sensible approach to the provision of future pensions and benefits, particularly when considering the demographic changes that are on course to affect all economies in the developed world. Simply put, people are drawing pensions for longer as lifespans increase, whilst birth rates remain static, reducing the ratio of workers to pensioners and therefore adding to the pressure on the pension fund. Jersey is in a robust position that few other jurisdictions can match but, nevertheless, it is inevitable that these trends must be factored into our long-term planning.

A high level summary of the 2017 results for the four funds is shown in Table 2 below:

Social Security  Social Security  Health  Long-Term Fund  (Reserve) Fund  Insurance Fund  Care Fund

£ million  £ million  £ million  £ million

Income  245.4  192.5  39.2  51.1 Expenditure  230.8  -  31.9  45.9

Table 2: Fund results for 2017.

Working with other departments

We also work closely with other departments across areas of joint interest.

The Social Security Department has operational responsibility for business licensing and housing control, with policy oversight remaining with the Chief Minister's Department. Officers work closely together to develop policy based on operational experience, and meet the ministerial Housing and Work Advisory Group on a regular basis to review cases, policy and operational impact. In 2017 fees under the Control of Housing and Work Law were increased in order to invest more in migration controls and skills development to support businesses. The fee changes included new annual fees for businesses employing registered staff and employment agencies placing registered staff, and a rise in the fees payable by contractors visiting Jersey.

The new measures will raise £600,000 per year which will be allocated:

• £300,000 to support additional investment in skills and training.
• £300,000 to support enhanced migration controls, including initiatives to remove permissions from businesses, and to support compliance activities.

During 2017, the Department worked closely with community and hospital pharmacists, GPs and the Health and Social Services Department on a pilot project to help patients leave hospital with the right medication and fully understand how to take it. The project provides clearer information to the patient and their GP as they leave hospital and a community pharmacist will help the patient after they have returned home, to understand their medication and check that they are taking it correctly and identify any issues they may have. Following development during 2017, this service was incorporated into the framework contract and was successfully launched in early 2018.

Towards the end of the year, officers from across States departments attended a workshop organised by the Department to consider the way in which the ageing population will affect the way that all public services are provided. The results of the workshop will be taken forward in 2018 alongside Future Jersey and considered as part of the preparation for the next Strategic Plan and Medium Term Financial Plan.

Snap shot of departmental activity in 2017  

Minister's R

Who does Social Security Support?

Income Support Child Component  Income Support Child Component  Income Support is an income related supports low income families with the  supports low income families with the  benefit that provides support for those living costs of their children  living costs of their children  looking for work and those in work

towards the cost of living.

Income Support Childcare  Income Support Childcare

Component supports working parents  Component supports working parents  Insolvency Benefit provides financial

with childcare costs of 0 to 11 year  with childcare costs of 0 to 11 year  assistance to employees whose employers olds  olds  become insolvent

Maternity and Adoption Grants  Dental Fitness Scheme helps toward  Back to Work teams provide support, provide a lump sum to help with the  the cost of dental treatment for 11-21  coaching and training to help unemployed general costs of having a baby  year olds  people back into work

Maternity Allowance is a weekly  Child Personal Care Benefit supports  Health and Safety Inspectorate ensures payment to help mothers while they  parents of children who meet the  employers provide safe working

take time off work to have their baby  requirements for the highest levels of  environments

impairment award

Home Responsibility Protection  Jersey Advisory and Conciliation Service Credits protect pension records for  Student Credits protect pension  provides advice to employers and

people who stay at home to care for a  records while students are in full time  employees

child  education

Short Term Incapacity Allowance is a Medical and Pharmaceutical Benefits  Medical and Pharmaceutical Benefits  daily benefit which provides income when subsidise the cost of visiting a GP and  subsidise the cost of visiting a GP and  a worker is unable to work due to sickness any medicines prescribed  any medicines prescribed

Survivor's Benefits support a spouse or civil partner if their partner dies

Key:

Medical and Pharmaceutical Benefits Tax funded Benefit/Service

subsidise the cost of visiting a GP and any Long-Term Care Benefit

medicines prescribed

Contributory Benefit/Credit

Health Insurance Benefits

Illness and Disability  Pensioners  Minister's Re

Income Support Health Components provide  Income Support supports lower income additional assistance to lower-income  pensioner households

households that include someone who has a  Food Costs* and Cold Weather Bonuses

long term health condition  provide help with the cost of food items and Housing Adaptation Grants help with the cost  heating the home for pensioners who don't pay

of adaptations to the home of those with  tax

permanent disabilities  Christmas Bonus* is a one off payment made Jersey Employment Trust and Back to Work  at Christmas to pensioners who don't pay tax help people with disabilities prepare for, find  TV Licence Benefit pays for the TV licence for

and maintain employment  over 75's who don't pay tax

Long-Term Care helps fund the care fees for  Pension Plus subsidises dental, optical and adults with care needs  chiropody costs for pensioners who don't pay

Long-Term Incapacity Allowance and  tax

Invalidity Benefit support those with a long  Long-Term Care helps fund the care fees for term illness or disability; either physical or  people with care needs

mental, both in work and those unable to work

Old Age Pension helps to cover basic needs in Home Carer's Allowance supports carers who  old age and is based on contributions paid

give up work to look after someone with high  throughout the working life

personal care needs

Death Grants help with funeral expenses Medical and Pharmaceutical Benefits

subsidise the cost of visiting a GP and any  Medical and Pharmaceutical Benefits subsidise medicines prescribed  the cost of visiting a GP and any medicines

prescribed

Gluten-Free Vouchers help individuals who

need a gluten-free diet  *These benefits are also available to some

working age families

Social Security Overview

The body of this report describes the activities of the Social Security Department:

Collection of contributions from individuals/employers.

Provision of benefits and services.

It is divided into five sections:

1. Fund Income Sources, which details the income sources to the funds administered by the Department.
2. Social Security Fund, which details the benefits administered under the Social Security Law.
3. Health Insurance Fund, which details the benefits administered under the Health Insurance Law.
4. Long-Term Care Fund, which details the benefits administered under the Long-Term Care Law.
5. Tax Funded Services and Benefits, which details the services provided and benefits administered through tax funded money, including Income Support and the Back to Work programme.

The figure opposite shows the Social Security revenue sources and demonstrates the financial flow through the funds into the benefits and services. For simplicity it does not show all the financial information, such as investment income, depreciation or administration. This detail will be provided in the States of Jersey Financial Report and Accounts 2017 and associated Annex to the Financial Report and Accounts 2017.

Minister's R

Figure 1: Flow chart demonstrating the Social Security Department income sources, funds, benefits and services 2017, excluding administration and other costs.

Section 2 – Fund Income

The Funds administered by the Social Security Department have three sources of income.

1. Contributions collected from individuals and employers
2. Grants from the States funded through taxation
3. Investment income

Social Security and Health Insurance Contributions

Contributions from working age adults are due on earnings up to pre-defined earnings ceilings, which are set on an annual basis. In 2017:

• A contribution rate of 12.5% is payable on all earnings up to the Standard Earnings Limit (SEL) of £50,160 per year.

For Class 1 contributors (employed) the 12.5% liability is split between the employer (6.5%) and the employee (6.0%). Class 2 contributors (self-employed and others not in paid employment) are liable to pay the full 12.5%.

• Since January 2012 a contribution rate of 2% is payable on earnings between the SEL and the Upper Earnings Limit (UEL) of £165,939 per year.

Employers and Class 2 individuals are liable to pay the 2% contribution.

In some situations employees are not required to pay their 6% liability, for example people who are in receipt of an Old Age Pension, people receiving Survivor's Allowance (in the first year of bereavement) and some women married before April 2001.

Income Received from Contributors

Table 3 provides an overview of the contributions received and the number of contributors:

2013  2014  2015  2016[1]  2017

Class 1 contributions paid by employers below SEL  

84,614  86,977  92,931  93,083  97,215  (£000)  

Sou Fund Income

Average Total contributions per annum (£)  3,638  3,731  3,823  3,840  3,957 Table 3: Contributions and contributors, 2013 to 2017.

Table 3 and Figure 2 show that the number of contributors increased by 0.8% on the previous year and the monetary value of contributions increased by 4% in 2017, compared to 2016.

Between 2013 and 2017 the value of contributions up to the SEL has risen by 15% compared to a 9.4% increase in average earnings over the same period, a real term increase of over 5%.

Figure 2: Total contributions and year on year change, 2013 to 2017.

Level of Contributions

In 2017, on average 35% of Class 2 contributors paid above the Standard Earnings Limit each month, with 12% paying at the maximum Upper Earnings Limit. By contrast, on average, 20% of Class 1 contributions in 2017 were paid above the Standard Earnings Limit, with only 1% paid at the maximum monthly contribution.

Figure 3 shows that proportionately more Class 1 contributors paid at the Standard Earnings Limit in March and December, the months typically associated with bonuses.

Figure 3: Class 1 contributors at the Standard Earnings Limit by month in 2017.

Number of Contributors

Contributions are recorded monthly and the number of Class 1 contributors shows a variation in line with the seasonal activities within the Jersey economy, with 4.7% more Class 1 contributors in July than February. Across the year there was a monthly average of 49,688, an increase of 372 Class 1 contributors (0.8%) from 2016, with the increase being driven by the second half of 2017.

For the third consecutive year, there has been an increase in the monthly average number of Class 2 contributors following a period of steady decline. This upward trend saw a small increase from a monthly average of 3,995 in 2016 to 4,098 Class 2 contributors in 2017.

Allocation of Contribution Income

Class 1 and Class 2 contributions are allocated to the Health Insurance Fund and the Social Security Fund according to fixed percentages.

Employer  Employer  Employee

Class 2  Class 2 Fund  Class 1  Class 1  Class 1

(below SEL)  (above SEL)  (below SEL)  (below SEL)  (above SEL)

Social Security Fund  5.3%  2.0%  5.2%  10.5%  2.0% Total  6.5%  2.0%  6.0%  12.5%  2.0%

Table 4: Percentage allocation of Class 1 and 2 contributions to the Health Insurance Fund and Social Security Fund.

Contribution Credits

In some circumstances contribution credits are available to protect people's contribution record and their entitlement to certain Social Security benefits. As well as protecting records during periods in which a contributory benefit is being claimed, credits are also available to:

• People caring for a child at home (1,170 people as at 31 December 2017).  
• People over 18 in full-time education (744 people as at 31 December 2017).  
• People who have been made compulsorily redundant (13 people as at 31 December 2017).  

The most common source of contribution credits is for those caring for a child at home. This is known as Home  

Responsibility Protection (HRP) and is available for an adult who is not working in order to look after a child under  

school age, with a maximum of 10 years of credits available for any one person.  Fund Income Sou

Long-Term Care contributions

In 2016, the maximum Long-Term Care contribution rate was increased from 0.5% to 1.0% and remained at 1.0% throughout 2017. The amount of contribution is based on an individual's total income taking into account their tax allowances and reliefs and is only chargeable up to the upper earnings limit (UEL). £19.2m of income was raised through Long-Term Care contributions in 2017, an increase of £1.2m compared with 2016.

States Grant to the Social Security Fund

Class 1 and Class 2 contributors with earnings below the Standard Earnings Limit in a given month, but above the Lower Earnings Limit, (£884 per month in 2017), normally receive a "top-up" supplement to bring their contributions up to the Standard Earnings Limit. This is called "supplementation" and protects pensions and benefit entitlement for lower and middle income earners,

The States provides an annual grant to the Social Security Fund. Up to 2010, the value of the States Grant was based on the exact cost of supplementation for the year in question. In 2011 a new method of calculating the value of the States Grant was established. This introduced certainty to the level of States contribution by setting the States Grant for 2011, and basing 2012 and future years on a formula set out in the law.

As part of the Fiscal Strategy Review, in 2011 the States agreed to introduce a 2% contribution rate for employers and Class 2 contributors between the Standard Earnings Limit and the Upper Earnings Limit, with the additional contribution income collected used to reduce the level of the States Grant by covering some of the cost of supplementation. This led to the value of the States Grant for 2012 and 2013 being at a relatively lower level than previous years due to the extra contributions raised through the introduction of the new 2% rate. In 2017 the value of the States Grant was maintained at its previous value of £65.3m. This was agreed as part of the Medium Term Financial Plan. The total value of the States Grant plus contributions above the Standard Earnings Limit was £73.2m, compared to the actual cost of supplementation of £80.9m.

2013  2014  2015  2016  2017 Year

£000  £000  £000  £000  £000 Cost of supplementation  69,239  72,123  77,232  79,548  80,935

Contributions above Standard

7,299  7,482  7,089  7,571  7,852 Earnings Limit

Table 5: States Grant in respect of the cost of supplementation, 2013 to 2017.

States Grant to the Long-Term Care Fund

The States also pays an annual grant to the Long-Term Care Fund. In 2017, the States Grant to the Long-Term Care Fund amounted to £31.8m, comprising a one-off £3.3m transfer from 2016 Social Security underspends and a statutory tax funded grant of £28.5m. Overall, this represents a £2.5m decrease on 2016. The value of the annual grant was originally set in 2016 based on the previous cost of supporting long-term care costs borne by the Social Security Department and the Health and Social Services Department. The value of the statutory grant is adjusted each year in line with the annual increase in RPI.

Fund Investments and Performance

Details of the investments and performance of the Social Security, Social Security (Reserve), Health Insurance and Long-Term Care Funds, along with details of the financial statements of the department are available in the States of Jersey Annual Report and Accounts 2017.

Section 3 – Social Security Fund Benefits (SSF)

The Social Security Fund pays for benefits to contributors who have made the required contributions and satisfy other specific conditions. Benefits mainly support claimants at times when they are less likely to be able to support themselves through employment, including maternity, sickness and old age. In 2017, the amounts paid across the full range of benefits available through the Social Security Fund are as follows:

2016  2017 Social Security Fund Benefit

£000  £000

Old age pensions  172,933  179,421 Short Term Incapacity Allowance  13,402  13,832

Ben

Social Security

Old age pensions can be claimed by anyone over pension age who has worked in Jersey and has paid Social Security contributions for at least 4½ years.[2] Pensions can be claimed by anyone who meets the contribution criteria, including people who have since left Jersey.

The value of the pension depends on the number of years of contributions with the maximum, full rate of pension being paid to those with a contribution record of 45 years or more.

Historically the old age pension was increased once a year in line with the growth in average earnings. In the past earnings have increased at a greater rate than inflation and thus the value of the old age pension grew in real terms. More recently however, and on a number of occasions, inflation has exceeded the increase in earnings and thereby the value of pensions has decreased in real terms. In 2013 a new uprating method was introduced to safeguard the value of the pension. This new methodology increases the old age pension with reference to both inflation, measured through the Retail Price s Index for Pensioners, and average earnings, measured by the Index of Average Earnings. The new method of uprating pensions ensures that pensions increase at least in line with inflation; at the same time, in the longer term, increases will track the growth of average earnings.

In October 2017 the annual uprate was applied using the new methodology, with the standard rate of pension increasing by 2.8% from £204.19 to £209.93 per week. For couples married before April 2001 a married pension is available based on the contribution record of the husband and the full pension is paid at 166% of the single rate (£348.53 for 100% pension).

The new methodology in uprating only applies to old age pensions. All other contributory benefits within Social Security legislation that refer to the standard rate benefit continue to be uprated by the index of average earnings. In October 2017 this led to an increase in the standard benefit rate (excluding pensions) from £204.19 to £209.51.

The current pension age is 65, with an option to take a reduced rate pension up to two years early. At present some women continue to have a pension age of 60, if they were registered for Social Security purposes before 1975. In 2014 the States passed legislation to increase the pension age in Jersey from 2020, with the pension age rising by two months per year, increasing the age from 65 to 67 by 2031.

Just over three-quarters (£179.4 million) of Social Security benefit expenditure is in respect of old age pensions. This cost is growing year on year as the number of pensioners increases. At the end of 2017 there were 31,441 pensions in payment. There has been an 8% increase in the number of pensions paid between 2013 and 2017 and an 9% increase in the rate of the pension leading to an overall increase of 16% in the total cost of pensions over this time.

Year  2013  2014  2015  2016  2017 No of Old Age Pensions in payment at year

end  29,052  29,582  30,122  30,880  31,441 Value of Old Age Pensions Paid £000's  154,229  160,464  166,746  172,933  179,421 Weekly full (100%) Old Age Pension rate at  £193.48  £197.40  £199.99  £204.19  £209.93

year end £

Table 7: Pension comparisons, 2013 to 2017.

The number of pensions in payment rose by just under 2% (561) during 2017, which follows a similar trend to previous years. This increase is shown in Figure 4.

Figure 4: Number of Old Age Pensions in payment at year end, 2013 to 2017.

Demographics of Old Age Pensioners

The female to male ratio slowly increases with age, reflecting the fact that, on average, women live longer than men. Of the 331 pensioners aged 95 or over, 255 (77%) are female.

Figure 5: Number of pensioners by age bracket as at 31 December 2017.  

Old Age Pension Payments  

At the end of 2017 there were 18,602 people receiving their pensions in Jersey, and 12,839 receiving their  

pensions outside Jersey.  Ben

Of the 12,839 pensions paid outside Jersey, 6,496 are paid in the UK and other Channel Islands, 4,914 are paid in  Social Security the rest of Europe and 1,429 paid across the rest of the world.

Figure 6: Distribution of where pensions are paid as at 31 December 2017.

The pensioners living in Jersey have typically paid more Social Security contributions having lived and worked for more years in Jersey, and therefore receive a larger pension. The lower levels of pensions paid abroad reflect Jersey's history of high levels of migrant labour where non Jersey born nationals have worked in Jersey for a relatively short period before leaving the island.

86% of Jersey residents receive a pension of over 50% of the full pension compared to only 16% of non-Jersey residents.

Figure 7: Distribution of weekly pension rate, Jersey resident and non-resident, as at 31 December 2017.

The higher average rate of pensions paid to residents in Jersey means that, although 41% of all pensioners are not resident in Jersey, they only received 18% (£33 million) of the total value of pension payments.

Pension  Pension  No. of Pensions as

Resident  % of Pensions

Value £000  Value %  at 31 December 2017

Jersey  146,239  82%  18,602  59% UK and other CI  16,935  9%  6,496  21%

Total  179,421  31,441 Table 8: Total value and number of pensions 2017.  

SSF – Survivor's Benefits and Death Grants

Two types of survivor's benefits are paid: Survivor's Allowance and Survivor's Pension. These benefits are paid on a percentage basis to survivors based on the contribution record of their deceased spouse or civil partner and are mainly paid to survivors while they are of working age. Survivor's Allowance is paid to a survivor for the first 52 weeks following bereavement and at 20% above the standard rate of benefit. After the first 52 weeks, Survivor's Allowance is replaced by Survivor's Pension which is paid at the standard rate of benefit. Survivor's benefits are not paid if the survivor remarries, co-habits or enters another civil partnership and they cease when the survivor reaches pension age. As of 1 January 2013 the eligibility for Survivor's Pension changed and since then the benefit is only payable to people with dependent children. People already in receipt of Survivor's Pension or Allowance and people born before 1 January 1957 are not affected by this change.

Type of Benefit  No. of Claimants  Average Weekly Claim Rate £ Survivor's Allowance  70  151.82  

Survivor's Pension  674  106.74  

Total  744  110.98  

Table 9: Number of claimants of survivor's benefits and average weekly claim rates as at 31 December 2017.  

Survivor's benefits are paid worldwide. Although 54% of the total number of survivor's benefits are paid in  Ben Jersey, 69% of the total value of survivor's benefit is paid in Jersey, as shown in Figure 8 and Figure 9. The

majority of survivor's benefits are paid to women (86%).  Social Security

Figure 8: Survivor's benefits claimant numbers by location in Figure 9: Survivor's benefit value by location in 2017. payment as at 31 December 2017.

A contributory Death Grant is available in respect of most deaths in Jersey. The value of the grant increased from £816.76 to £838.04 in October 2017. Grants are also paid in respect of individuals living outside Jersey at the time of their death, if they were receiving a full-rate benefit, such as a 100% old age pension rate, immediately prior to the date of death or their departure from Jersey was less than six months prior to the date of death.

In the small number of cases where a Death Grant is not payable under the contributory system, a non- contributory grant can be provided using a tax-funded budget.

2013  2014  2015  2016  2017 Total Value of Death Grants

689  678  740  806  790 £000

Individual Death Grant Value as at 31  765.52  785.68  799.96  816.76  838.04 December £

Table 10: Total value of Death Grants paid and value of an individual Death Grant, 2013 to 2017.

SSF – Short Term Incapacity Allowance (STIA)

Short Term Incapacity Allowance (STIA) is usually authorised by GPs and paid to working age claimants who satisfy the necessary contribution conditions for periods of incapacity lasting between 2 and 364 days.[3] Most STIA claims are paid at the standard rate of benefit. This was £204.19 per week at the beginning of 2017, rising to £209.51 per week from 1 October 2017.

2013  2014  2015  2016  2017 Cost of STIA Claims £000  12,938  12,413  12,315  13,402  13,832 No. of STIA Claims Paid  25,703  24,743  25,514  26,521  25,106

T

Table 11 details the number of claims paid and the total number of days covered by STIA claims over the past five years.

Figure 10 shows the trends in the total number of STIA claims and the average (mean) length of claim. It highlights that claims have on average continued to increase in length since 2016 but the number of claims has decreased by 5% compared with 2016

Figure 10: Annual number and average length (in days) of STIA claims, 2013 to 2017.

STIA covers a wide range of short-term illnesses and injuries. 24% of all claims during the year related to infectious illnesses, a decrease from 28% in 2016. These claims lasted an average of 7.8 days. By contrast, depression, stress and anxiety accounted for 11% of the claims but 21% of the number of days, with an average duration of over five weeks per claim.  Table 12 details some of the most common reasons for STIA claims in 2017:

% of all 2017  No. Of Claims  No. Of Days  Average Claim

STIA Reason for Claim

Claims Paid  Paid  Paid  Length (Days)

Infections  24%  6,101  47,169  7.7 Hospital treatment  16%  3,907  98,015  25.1

Table 12: Most common reasons for claiming STIA in 2017.

Some individuals have a long-term health condition that lasts for more than a year. These claimants can apply for Long Term Incapacity Allowance (LTIA). Whereas a claimant cannot claim STIA and work, LTIA claimants can return to work or stay in work and continue to claim the benefit.

SSF – Long Term Incapacity Allowance (LTIA) and Invalidity Benefit (INV)

These benefits are paid to working age people who satisfy the necessary contribution conditions and who have a long-term loss of faculty.[4]

LTIA compensates people for their loss of faculty, regardless of whether it is as a result of an illness or injury. Unlike STIA, it is based on a Social Security medical assessment not a doctor's certificate and has different criteria to STIA. It is assessed as a percentage of the standard rate of benefit based on their loss of faculty and is an in work benefit. The maximum value of the benefit (100%) is set at the standard rate of benefit. In October 2017 the  rate rose from £204.19 per week to £209.51 per week.  

A minority of claimants will be assessed at 100% for a major loss of faculty. Most claimants are assessed at a lower  percentage, in 5% bands.  

Ben

Social Security

Figure 11: Number of LTIA claims in payment by rate % as at 31 December 2017.

The average percentage rate of assessment for LTIA claims in payment in 2017 was 37% and this percentage has remained more or less constant over the last five years.

As with STIA, LTIA covers a wide range of illnesses and injuries. Depression is by far the most common condition, accounting for 16% of all claims. Back pain and back injuries combined accounted for 12% of all claims.  Table 13 identifies the most common conditions in 2017.

Average % Degree of LTIA Condition  No. of claims  % of all claims

Incapacity

Depression  651  16%  36% Pain - Back  382  9%  28%

Table 13: Most common LTIA conditions at 31 December 2017.

LTIA was introduced in October 2004 to replace Invalidity Benefit and Disablement Benefit. Invalidity Benefit was payable as a result of a permanent illness and did not allow claimants to undertake work whilst claiming. Disablement Benefit was payable as a compensation for a permanent disability as a result of an accident, and allowed claimants to undertake work whilst claiming.

Figure 12 shows an ongoing decrease in the number of Invalidity Benefit claims as all new claimants now receive LTIA. Combined, the number of people receiving LTIA and Invalidity Benefit has been relatively stable over recent years with a 2.4% increase over the four year period 2013 to 2017.

2013  2014  2015  2016  2017

LTIA  

3,815  3,958  4,035  4,125  4,184 claims

Total claims  4,574  4,625  4,630  4,654  4,686 Figure 12: Number of Invalidity and LTIA claims at 31 December, 2013 to 2017.

SSF – Maternity and Adoption Benefits

A Maternity Grant (or Adoptive Parent Grant) is paid to help with the initial general costs of having a baby. The Grant is available as a lump sum to either the father or mother who satisfies the contribution conditions. The value in 2017 was £612.57, rising to £628.53 from 1 October 2017. Multiple grants are provided in the case of multiple births. The great majority of parents having a baby in 2017 received a Maternity Grant from the Department. 949 births were recorded in 2017 with 910 maternity grants being paid by the Department in 2017. Figure 13 shows the nationality of those in receipt of Maternity Grants in 2017:

Ben

Social Security

Figure 13: Maternity Grants claimed in 2017, by nationality.

Figure 14: Nationality of age 18-50 female population registered with the Social Security Department as at the end of 2017.

Just under two-thirds of parents receiving Maternity Grants have British nationality, with the remainder largely reflecting the nationalities of the local female population aged 18-50. The average age of a woman in receipt of Maternity Benefit in 2017 was 32. Grants were paid in respect of 10 cases of twins born in 2017.

A weekly Maternity Allowance can also be payable to the mother. This can be paid for up to 18 weeks, at the same rate as STIA, but based on only the mother's contribution record before she became pregnant.

Indicator  2013  2014  2015  2016  2017

No. of Maternity Allowance claims starting in the

894  834  876  898  845 year

No. of Maternity Grant claims paid in the year  970  837  1,020  931  910 No of Births Recorded[5]  1,017  989  997  1,008  949

Table 14: Maternity indicators, 2013 to 2017.

SSF – Home Carer's Allowance (HCA)

At the beginning of 2013, the Home Carer's Allowance replaced the Invalid Care Allowance tax funded benefit. The new benefit is similar to the old Invalid Care Allowance, and is in place to help people who give up employment to take on a caring commitment for a person who needs a high level of personal care.

To qualify for Home Carer's Allowance claimants should be of working age, spend at least 35 hours each week caring and have earnings of no more than £153.00 per week. These requirements were also in place for the old benefit.

In the past people with an annual household income of £62,382 (2012 cap) or over could not claim Invalid Care Allowance. Now the household income cap has been removed. There is, however, a requirement for the carer to have a Social Security contribution record. The new benefit also requires that the "cared for" person has lived in Jersey for at least one year.

In 2017 there were 176 claimants, of which the majority were female, at a total cost of almost £2.0 million.

Gender  Claimants  Average age Female  140  50

Table 15: Number of Home Carer's Allowance claimants as at 31 December 2017 by gender and average age.

SSF – Insolvency Benefit

Insolvency Benefit was introduced on 1 December 2012 and provides financial assistance to employees who are made redundant due to the insolvency of their employer. This benefit replaced the temporary, tax funded, insolvency scheme originally introduced in 2009. The amount of benefit is calculated based on amounts owed to employees by the former employer in respect of the following four components:

1. Unpaid wages relating to the 12 months prior to employment ending.
2. Holiday pay relating to the 12 months prior to employment ending.
3. Statutory redundancy pay (one week's capped pay for each year of service, subject to a minimum of two years' service).
4. Pay in lieu of notice on termination of employment (up to 12 weeks' pay).

The maximum amount of Insolvency Benefit is capped at £10,000 and the Social Security Fund will meet the person's liability for Social Security contributions and income tax (ITIS) on those sums.

During 2017, there were 15 new claims from the former employees of three insolvent employers which resulted in payments of £54,000.

Section 4 – Health Insurance Fund Benefits (HIF)

The Health Insurance Fund provides benefits to local residents in respect of specific primary care costs. The full range of benefits and the cost of these benefits for 2017 are as follows:

2016  2017 Health Insurance Fund

£000  £000

Medical Benefit – GP consultations   7,195  6,946 Medical Benefit – pathology benefit  941  932 Jersey Quality Improvement Framework (JQIF)  1,587  1,579 Pharmaceutical Benefit - drug costs   13,375  12,954 Pharmaceutical Benefit - dispensing fees   6,815  6,874 Gluten-free Vouchers  393  471 HIF Contracts  -  349 Total benefit expenditure  30,307  30,105

Table 16: Health Insurance Fund benefit expenditure for 2016 and 2017.

HIF – Medical Benefits (GP Consultations)  

A standard benefit is paid in respect of each GP consultation covered by the Health Insurance Fund. Throughout  2017 the value of the benefit was set at £20.28. The separate benefit, paid at the same rate, previously available  in respect of the cost of a letter of referral written by a GP to a hospital consultant or other specialist, was  withdrawn in line with the introduction of the JQIF contract payments.  

Fun Health Insuran

2013  2014  2015  2016  2017

No of GP consultations   351,099  349,102  355,497  358,914  338,494 Value of Medical Benefit as at

20.28  20.28  20.28  20.28  20.28

31 December £   Table 17: Volumes and costs of GP visits and consultations, 2013 to 2017.

HIF – Jersey Quality Improvement Framework (JQIF)

The Jersey Quality Improvement Framework (JQIF) was introduced in 2015 as an additional income stream for GP practices based on a standard contract aimed at encouraging high quality outcomes for patients. All GP surgeries participated and in 2017, the contract contained 36 clinical and organisational measures describing the standards and activities which GP surgeries should achieve. These included, for example, the creation of a register of patients with diabetes and measures regarding specific interventions for this condition. Payments were made to GP practices according to their level of activity against each measure totalling £1.6 million.

HIF – Primary Care Contracts

In 2017 contracts were agreed with GP practices and community pharmacists to provide flu vaccinations to at risk and targeted groups. A total of 16,243 at risk individuals were vaccinated at a cost of £349,000.

HIF – Pathology Laboratory Benefit

In January 2010 the Health and Social Services Department introduced a charge for analysing blood samples provided by GPs. A new benefit was set up within the Social Security Department, funded through the Health Insurance Fund, to ensure that this cost was not passed on to the patient. The benefit covers blood samples taken for haematology testing and for clinical chemistry testing and was introduced at a standard rate of £10 before being increased to £10.35 in June 2012, and has remained at that rate since.

2013  2014  2015  2016  2017

Cost of Pathology Laboratory

benefit claims paid during year  919  893  924  941  932 £000

Value of Pathology Laboratory

10.35  10.35  10.35  10.35  10.35

benefit on 31 December £

Table 18: Number and cost of Pathology Laboratory benefit claims, 2013 to 2017.

HIF – Pharmaceutical Benefit

Pharmaceutical benefit covers the full cost of prescription drugs prescribed by GPs and dentists and includes a dispensing fee paid to community pharmacists, in respect of each item dispensed. The Minister for Social Security is responsible for maintaining the list of drugs that are available on prescription from GPs.

2013  2014  2015  2016  2017 Total No. of items prescribed

1,846,713  1,871,770  1,936,690  1,983,296  1,959,815 during year

Average cost of a prescribed item

6.44  6.65  6.96  6.74  6.70

£

Table 19: Costs of Pharmaceutical Benefit, 2013 to 2017.

In 2017 there were almost 2 million prescriptions dispensed with a total drug cost of £13.0 million.

Since 2013 there has been an 6% increase in the number of items prescribed, which is highlighted in Figure 15.

Figure 15: Annual pharmaceutical items prescribed, 2013 to 2017.

Types of Drugs Prescribed

In 2017, a total of 1,959,815 prescription items were dispensed in the community with a net cost to the Health Insurance Fund of just under £13m. The number of items dispensed was 1% lower than the previous year, with a fall in total net drug costs of 3%. Since January 2014, the volume of prescription items dispensed has increased by  5% while total net drug costs have risen by 4%. By comparison, items and costs have changed by 4% and 3.5% in  England.  

Two notable changes occurred in 2017 that impacted on the cost and volume of prescription medicines. Firstly,  

changes were made to the provision of influenza vaccine allowing it to be issued by pharmacies as well as by local  

GPs. This reduced the total number of prescriptions dispensed by nearly 18,000, contributing to the lower growth  

in prescription volume. Secondly, the patent on pregabalin, a medicine used in the treatment of epilepsy and  Health InsuFurann nerve pain, expired allowing lower cost generic versions of the medicine to be dispensed. This reduced total

annual expenditure for the drug by around £300,000 compared with the previous year, with a drop in the average

cost of each pregabalin prescription from £60 per item in 2016 to £37 per item in 2017.

Figure 16: Volume of items prescribed by medicine category in 2017.

Medicines to treat diseases of the heart and circulation remain the most commonly prescribed group, accounting for around 1 in 3 prescriptions dispensed in the community in 2017. This group of medicines covers a wide range of conditions, including cholesterol lowering medicines, treatments for high blood pressure, and anticoagulants that thin the blood. As well as medicines for the heart, other groups of medicines that are increasingly dispensed include antidepressants (3% increase from 2016) and medicines for diabetes (up by 8%).

There were falls in the prescribing of a number of groups of medicines, including antibiotics (down by 7% compared with 2016), painkillers (down by 3%), sleeping tablets (down by 6%) and medicines for osteoporosis (down by 14%).

As in previous years, medicines that act on the nervous system account for the largest proportion of medicine costs. However, costs in this group fell by 8% compared with 2016, largely due to the fall in the price of pregabalin. In contrast, costs for medicines acting on the heart and circulation (the second highest cost group) increased by 7%, driven by the increasing use of newer and more expensive medicines to thin the blood (anticoagulants).

Figure 17: Cost of items prescribed by medicine category in 2017.

HIF – Gluten-free Scheme

Individuals who require a gluten-free diet can receive vouchers towards the cost of purchasing gluten-free products. The current value of the vouchers is £14 per beneficiary per week.

2013  2014  2015  2016  2017

Cost of Gluten-free Vouchers  

256,615  278,516  328,967  392,647  470,713 £

A£ verage cost per claimant   607  579  575  613  671 Table 20: Gluten-free claimants and costs, 2013 to 2017, as at 31 December.

Section 5 – Long-Term Care Fund Benefits (LTCF)

A new Long-Term Care Fund was set up at the end of 2013. This ring-fenced fund is designed to collect Long-Term Care contributions from tax payers and makes benefit payments to adults who have long term care needs.

Initial funding was provided by the States to allow benefits to be paid from 1 July 2014 whilst collection of Long- Term Care contributions started at the beginning of 2015. The Long-Term Care scheme continues to be funded by an annual States grant and the collection of Long-Term Care contributions, which in 2016 increased from 0.5% to 1% of taxable income up to the Upper Earnings Limit. In total, £44.6m was paid out in Long-Term Care benefit in 2017, which was an increase of £2.3m compared to 2016.

Long-Term Care benefit

One of the key features of the Long-Term Care scheme is to protect households from the uncertainty associated with the risk of incurring catastrophic care costs. To this end, the Long-Term Care benefit (a universal non-means- tested benefit) is payable once care costs reach a certain level – regardless of a household's income and assets.

Long-Term Care benefit helps all households with their care costs once they have reached the standard care costs cap (£54,480 at the end of 2017). The benefit is paid at 4 levels, depending on the type and level of care needed. The weekly rates as at 31 December 2017 were set at:

Level of  Weekly cost for standard standard care  care in a care home £

1  369.18 2  563.50 3  814.52 4  1024.10

Table 21: Long-Term Care standard care costs as at 31 December 2017.  

The Long-Term Care benefit is also available to people receiving care in their own home. In this case, the benefit  rate reflects the actual cost of care up to the standard care cost in a care home.  

Term Care

-

Ben The universal Long-Term Care benefit does not cover the living costs of being in a care home. Support for care

costs up to the standard care costs cap of £54,480 and living costs in a care home are provided through two other  Long aspects of the Long-Term Care scheme – Long-Term Care support and Long-Term Care property loans.

Long-Term Care support

Long-Term Care support (means-tested financial support) is available to households to help meet care costs and living costs in a care home, depending on the income and assets of the household.

Long-Term Care support is available to households whose income is not enough to meet these costs and whose total assets are below £419,000. Long-Term Care support helps towards standard care fees and the costs of living in a care home (£326.97 for board and lodging plus £35.70 personal allowance per week in 2017). People receiving care at home can claim Long-Term Care support to help cover their care costs, if necessary, alongside an income support claim which helps with basic living costs.

Long-Term Care property loans

Another important driver for the introduction of the Long-Term Care scheme was to improve financial support for homeowners facing high care bills. Depending on income and assets, property loans are available to help cover care costs and living expenses. Loans are interest bearing at a rate of 0.5% above the Bank of England base rate which in 2017 was 0.25% until the 02 November 2017, when it increased to 0.5%.

Demographics

As at 31 December 2017, 1,335 individuals were being supported through the Long-Term Care scheme.  Figure 18 below demonstrates the demographic profile of those within the scheme; showing that overall there are almost twice as many women on the scheme as there are men, and that this proportion grows with older age.

Figure 18: Long-Term Care claimants 31 December 2017.

Section 6 – Tax Funded Services and Benefits

The Department delivers a range of tax-funded, rather than contributory, benefits that are funded directly by the States of Jersey, shown in Table 22.

2016  2017 £000  £000

Income Support: Weekly Benefit  70,469  67,166

Income Support: Residential & Nursing Care Fees  (10)  -

Income Support: Transition (Protected) Payments  221  156

Income Support: Special Payments  741  564

Income Support: Cold Weather Payments  562  486

Income Support: Total  71,983  68,919 Benefits  

Christmas Bonus  396  333

Food Costs Bonus  260  259

Cold Weather Bonus  227  222

Jersey 65+ Health Scheme / Pension Plus  275  460

TV Licence Benefit  275  258

Other Benefits (under £100,000 each)  142  193

States Contribution to Social Security Fund  65,300  65,300 States Grant

States Contribution to Long-Term Care Fund  34,321  31,795

Table 22: Tax-funded benefit expenditure (excluding administration) for 2016 and 2017.

Tax Funded Services – Back to Work

Introduction

In late 2011, existing employment support teams were brought together to form the Back to Work programme. It was established to strengthen the government's response to rising unemployment and complements our benefits system, which is designed to make work pay, and is a key part of the government's strategy of getting people back to work.

The aim of the Back to Work programme is to support people who are actively seeking work, and to help them  back into paid employment.  

Over the course of 2017, Back to Work has continued to enhance its existing provision in order to provide a swift  and flexible response to the needs of both jobseekers and employers. Its role is to:  

and

• Co-ordinate the work of all government employment schemes.

Tax Funded Se

• Develop targeted schemes to support locally qualified jobseekers.
• Build a partnership with employers to provide sustainable job opportunities for locally qualified

Islanders.

Teams and Initiatives

The aim of every team and initiative within the Back to Work programme is to get unemployed Islanders working, keep people in work and create new employment opportunities linked to sustainable economic growth. Employers benefit from an increase in support and financial incentives, and jobseekers have access to training and support to improve their confidence, skills and motivation to move into the workplace.

In 2017 Back to Work continued to expand its services to demographics who hadn't previously benefited from targeted support, specifically adults with lower awards of Long Term Incapacity Benefit (LTIA).

Including these groups resulted in an increase in the Actively Seeking Work (ASW) figures, adding an extra 46 people to the ASW figures during 2017. Back to Work also continued to offer its services to parents of nursery school children, bringing in an additional 107 people. Even with these extra groups included, there was an overall decrease in ASW numbers, ending the year at 950: the lowest recorded unemployment figures since September 2009.

Back to Work customers have the support of an Employment Advisor, and can also access training and other work placements to support them into suitable employment and move them towards financial independence.

The number of young people aged 16-24 who were registered as jobseekers fell from 240 to 150 during the year. This represented a great success for targeted Back to Work initiatives for this group, who are especially vulnerable at the start of their working lives.

Back to Work customers can access support from the following specialist teams:

• Advance to Work
• Advance Plus
• Ready for Work
• Work Zone
• Work Right
• Foundations scheme
• Occupational Support Unit (for those jobseekers currently unable to look for work due to serious personal circumstances)

In addition to these teams, Back to Work also includes:

• Back to Work Recruitment – (previously Employer Engagement Team) which provides employers with a tailored recruitment service and financial incentives to encourage them to employ unemployed islanders.

Advance to Work

Advance to Work helps young people who are looking for work make the transition between education and employment. It provides a programme of general and vocational training, personal advisor support and work experience with local employers. Advance to Work's target age group is 16 to 24.

Advance Plus

Advance Plus runs industry-specific schemes for motivated jobseekers aged 20 and over who are registered as actively seeking work. The scheme combines intensive training, a five-week unpaid work placement and advisor support to improve a jobseeker's opportunities for work.

Ready for Work

Ready for Work is the first point of contact for anybody registering as actively seeking work, and provides a referral service across Back to Work should a jobseeker require additional support. The Ready for Work service provides a range of jobseeking support as well as facilities to support jobseekers to find employment.

Work Zone

The Work Zone team of Employment Advisors provide one to one support for work-ready clients through intensive job-seeking activities and training as well as supporting clients already working part time to find more work.

Work Right

The Work Right team offers support and advice about job-seeking to people who are long-term unemployed or have barriers to employment. The team aims to bring its clients closer to finding suitable employment through training and individualised action plans.

Foundations

The Foundations scheme was introduced in 2014. It is designed to support jobseekers who are furthest from employment by bringing them closer to, and back into, employment through providing real work experience. This includes working on manual community benefit projects on various sites across Jersey. The work undertaken benefits the community and would not otherwise have been undertaken, examples include: improvements to National Trust land, the Railway Walk and to the premises of community-based services including Highlands College and Le Squez Youth Club. In 2016, Foundations expanded to include a scanning project for jobseekers more suited to office based work.

Foundations provides workers with:

• Experience of work, to improve their general employability in areas such as attendance, positive attitude, teamwork and motivation to work.
• Construction-based skills that include painting and decoration, external maintenance works, and site maintenance.
• Office based skills that include computer and scanning machinery usage and experience with a range of IT packages and skills such as attention to detail.

Occupational Support Unit

The purpose of the Occupational Support Unit (OSU) is to support clients who are unable to engage with the other Back to Work employment provision, and may be deemed either currently or permanently to have significant barriers to employment for one or more reasons. The advisors on this team will support their clients through  referrals to relevant supporting agencies, such as Drug & Alcohol or Mental Health Services, and work in  partnership with Probation or other services where required.  

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Financial Incentives

A number of financial incentives are available to employers to support the long-term employed back into employment. These incentives are managed through Back to Work Recruitment.

• The Employment Incentive offers employers wage reimbursement for the first six months of employment, that is £6,958 (at minimum wage for up to 35 hours per week) for permanent contracts of employment for under 25s who have been registered as ASW for six months or more and jobseekers 25 years old and over who have been registered as ASW for 12 months or more.
• The Hospitality Paid Training initiative provides a financial incentive to hospitality employers who recruit and train candidates with no experience in the industry, with their salaries being paid for the training period for up to eight weeks.
• The Construction Paid Training and Digital Paid Training initiatives fund the wages and Social Security contributions for up to 40 hours per week for up to 12 weeks at minimum wage (up to a value of £3,670) for jobseekers with no experience in this industries.
• The Community Jobs Fund provides up to six months' wages for young or long-term jobseekers employed by a charity or organisation that can provide a role offering a clear, additional benefit to the community.
• In 2017, BTW began working in partnership with Jersey Employment Trust to fund up to 10 roles in the new Acorn Re-cycling Plant. Eligible jobseekers are those who have progressed through the Foundations scheme (either the paid or unpaid strands) and are able to take on a less supported role in either the re- cycling or retail areas on the JET Re-use scheme. Posts are funded by BTW for up to 6 months.

Actively Seeking Work: Statistics

We gather and maintain data on all individuals who are actively seeking work. This data is reported to the Statistics Unit on a monthly basis and is used to produce and publish an independent analysis.

This is illustrated in Figure 19 which shows the number of individuals who were actively seeking work from 2013 to 2017, with 950 people ASW in December 2017 compared to 1,280 in December 2016. In December 2017 approximately one third of those registered as actively seeking work were working part-time, but were required to find more hours under their Income Support requirements.

Figure 19: Number of individuals actively seeking work at 31 Dec, 2013 to 2017, including an estimate of the baseline total without additional ASW groups.

As previously noted, changes in ASW reporting since 2015 have resulted in increases to the numbers of people recorded as ASW. These had the effect of including certain Income Support groups in the ASW figures for the first time. Despite this, Back to Work was still able to report a positive trend of decreasing numbers of people looking for work, particularly through the additional support services offered to these groups.

The Back to Work teams and initiatives helped unemployed people into 1,809 paid jobs in 2017, compared to 2,036 in 2016 and 1,910 in 2015 when unemployment levels were higher. There is no doubt that without the investment in Back to Work the numbers of those registered as actively seeking work would have been higher.

Scheme  Jan - Mar  Apr - Jun  Jul - Sep  Oct - Dec  Total WorkZone  123  123  86  55  387 Work Right  160  192  187  180  719

Table 23: Numbers of jobs started by customers of each scheme during 2017.

Actively Seeking Work: Demographics of Individuals

There were 2,842 individuals who were actively seeking work at some point during 2017. The split between males and females was approximately 50%, with the largest group being represented by males aged between 16 and 19 (213, 7% of all Islanders in this category registered as actively seeking work at some point during the year).

Figure 20: Gender and age bracket of individuals actively seeking work at some point in 2017.  and Tax Funded Se

Almost 90% of individuals registered as actively seeking work were part of an Income Support household. This proportion increased in 2017, as new groups of Income Support claimants were brought into Back to Work services. Overall, the proportion of individuals who were long-term unemployed increased during 2017. This is in part due to the additional groups that were introduced in 2015 and 2016 some of whom will have remained actively seeking work into and throughout 2017.

31 December 2016  31 December 2017 Total No. of individuals ASW  1,280  950

No. of individuals also on Income Support  1,040  840

Table 24: Numbers and proportions of the three target categories at the beginning and end of 2017.

Tax Funded Services – Jersey Employment Trust

The Jersey Employment Trust (JET) is a charitable trust whose primary role is to assist people with a disability and/or a long-term health condition to find and sustain employment. JET provides a range of employment support services, from pre-vocational education courses, work tasters in its own vocational training areas and work experience placements in other commercial settings. The trust helps people to find suitable employment opportunities and also provides on-the-job training and support.

The grant awarded to JET in 2017 was £1,903,792.

More information can be found on the JET website (http://www.jet.co.je).

Tax Funded Services – Jersey Advisory and Conciliation Service

The Jersey Advisory and Conciliation Service (JACS) is an employment relations service that helps employers, employees and trade unions work together for the prosperity of Jersey business and the benefit of employees. JACS also helps explain the changes in employment and discrimination law that have been enacted and those which are expected in the next few years.

The services provided by JACS seek to:

• Prevent and resolve employment disputes.
• Provide impartial information and advice to employers and employees on employment matters.
• Improve the understanding of employment relations.

The Social Security Department provides an annual grant to JACS in order to deliver its services, which in 2017 was £370,538. In addition to the main JACS services, an outreach service provides proactive and in-house assistance to small employers (typically with 10 or fewer employees) at an early stage in order to help prevent employment related problems arising in the first place, and to remove the perceived barriers to employing staff by ensuring that employers have an essential tool kit of employment documentation.

The Social Security Minister approves board members appointments.

More information can be found on the JACS website (http://www.jacs.org.je/)

Tax Funded Services – Health and Safety Inspectorate

The Health and Safety Inspectorate carries out a wide range of actions aimed at ensuring that people at work and others who could be affected by working activities are not exposed to risks to their health or safety.

These actions, which are prioritised to address serious health and safety issues, include:

• Investigating work-related events which have resulted in death, serious injury or ill health.
• Inspecting high risk workplaces to gain compliance with Occupational Health and Safety (OHS) legislation.
• Providing advice and guidance to enable those seeking help to meet their duties under OHS legislation.
• Taking action on complaints about working conditions and activities within our stated complaints policy.
• Enforcing OHS legislation within the Inspectorate's stated enforcement policy.
• Collating and publishing statistical information on work related accidents and ill health.
• Carrying out targeted action in specific areas to seek improvements in the understanding and management of OHS.
• Supporting industry-led initiatives to improve OHS.
• Developing the legal framework for OHS to support the improvement of the control of risks in the workplace.

The Health and Safety Inspectorate publishes a separate annual report which gives more detail on specific activities.

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Tax Funded Benefits – Income Support

Introduction

With expenditure in 2017 of just under £69 million, the Income Support benefit is by far the largest tax-funded benefit that we provide. Within that total, support is provided to households and individuals in a variety of different circumstances. An analysis of the £69 million spent in 2017 is as follows:

Category  2016  2017

£000  £000

Income Support: Weekly Benefit   70,469  67,166 Income Support: Residential & Nursing Care Fees[1]  (10)  - Income Support: Transition (Protected) Payments  221  156 Income Support: Special Payments  741  564 Income Support: Cold Weather Payments  562  486 Total  71,983  68,919

Table 25: Categorised 2016 and 2017 Income Support benefit expenditure.

Most of the spending on Income Support is used to provide a weekly benefit to eligible local families. Funding is also available to help with one-off costs. Until the end of June 2014, Income Support also provided financial assistance to people living in care homes. From 1 July 2014 this was replaced by the new Long-Term Care scheme.

Income Support: Weekly benefit

Income Support is a household benefit. The amount paid to an individual household depends on the number of people in the household, where they live, their specific needs, and the income and capital assets of the household.

Income Support is available to households in which at least one adult meets a residence test (of at least five years residence in Jersey). Income Support claimants aged 65 and above are not subject to a work test but every adult aged under 65 must meet a work test by either being in full-time work or being included in an exempt category.

Who receives Income Support?

Income Support legislation includes specific rules as to who is included within an Income Support household. In general terms, an Income Support household comprises an adult claimant and, if applicable, their spouse, civil partner or other long-term partner and dependent children.

For Income Support purposes, children are defined as those aged below compulsory school leaving age.[2]

Young adults above compulsory school leaving age continue to be included within the household of their parents if they are under 25 and actively seeking work or in full-time education.

There are additional rules in respect of young people with disabilities.

An extended family living together is considered as separate Income Support households. For example, a couple with two young children sharing accommodation with the wife's parents and the husband's brother and sister-in- law are treated as three separate households:

• The couple and their two dependent children.
• The wife's parents.
• The husband's brother and his wife.

Each household must satisfy the tests for Income Support separately.

At the end of December 2017, a total of 5,763 households were receiving Income Support. These households were made up of: 7,350 adults and 3,122 children.

For this report, these household claims have been split into four groups:

1. 65 years and above (65+): all households that include one or more adults aged 65 or above.
2. Working age adults with no dependent children (adult/s without children): one or more adults all aged below 65, with no dependent children.
3. 2 or more adults with dependent children (adults with child/ren): 2 or more adults aged below 65 with one or more dependent children.
4. Single adult with dependent children (single adult with child/ren): a single adult aged below 65 with one or more dependent children.

The distribution of adults and children amongst these household groups is as follows:

Average  Average No. of  Total No. of  (mean) No. of  Total No. of  (mean) No. of

Household Type  Claims  Adults  Adults per  Children  Children per Claim  Claim

65+  1,726  2,065  1.2  6  0.0 Adult/s without children  2,176  2,494  1.1  -  -

Table 26: Number and average number of adults and children on Income Support claims as at 31 December 2017.

Over the previous five years, the distribution of household types across all Income Support claims has remained  

relatively stable, with a slight decrease in the proportion of adult claims without children. This has been caused in  

part by changes in the Income Support rules, which now include young jobseekers under the age of 25 in their  

parents' household. Until 2011, all jobseekers were treated as separate households  and Tax Funded Se

Figure 21: Distribution of income support claims by household type as at 31 December, 2013 to 2017.

Well over half of all Income Support households consist of a single adult without children: 1,900 adults aged up to 65 (33% of all claims), and 1,391 adults aged 65 and above (24% of all claims).  Table 27 provides more detail:

No. of claims that include:

Household Type

Total

65+  1,391  331  4  -  1,726