The official version of this document can be found via the PDF button.
The below content has been automatically generated from the original PDF and some formatting may have been lost, therefore it should not be relied upon to extract citations or propose amendments.
STATES OF JERSEY
INCREASE IN ASSETS AND SAVINGS THRESHOLD FOR THE AFFORDABLE HOUSING GATEWAY
Lodged au Greffe on 28th March 2025 by Deputy D.J. Warr of St. Helier South Earliest date for debate: 22nd April 2025
STATES GREFFE
2025 P.26
PROPOSITION
THE STATES are asked to decide whether they are of opinion
to request the Minister for Housing to increase the qualification criteria for savings and assets allowable to enter the Affordable Housing Gateway to £200,000 for individuals of pensionable age.
DEPUTY D.J. WARR OF ST. HELIER SOUTH
REPORT
The objective of this proposition is twofold –
- reduce poverty levels in our retired population
- free up much needed family homes.
This proposition uses data from three key sources. The answers published to Written Question 58/2025 and Written Question 3/2025 and the report entitled "Jersey Household Income Distribution Report 2021/22".
In answer to WQ.3/2025 the Minister for Social Security identified the weekly differential between a full pension and that earned by an individual on a minimum wage as being £179 per week. A pensioner gets paid £286.51 per week, whilst an individual on the minimum wage gets £466 per week. The Minister admits that it is impossible for the State to make up that differential. Simply put, it appears we tolerate pensioner poverty but don't tolerate worker poverty.
I for one am not prepared to accept the status quo and this proposition attempts to go some way to right this wrong. Changing the upper eligibility cap on the savings or capital assets for accessing the Affordable Housing Gateway is an obvious way to improve the quality of life of those we describe as "asset rich, cash poor".
The current limit of £70,000 was set in April 2022. In his answer to WQ.58/2025 I was incredibly disappointed that the Minister for Housing thought that this limit is still deemed appropriate, I will explain in this report it clearly is not.
There are some very simple calculations that can be used to back up this statement.
It is not unreasonable to endeavour to match a minimum wage with a "living" pension. Surely any effort to reduce pensioner poverty is a good thing. I've already established that the differential is £179 per week. How can we bridge that gap?
I believe we need to take a serious look at the current maximum limit for assets and savings of £70,000 as it's a huge barrier to lifting many pensioners out of poverty.
If it were possible to put this sum in a savings account, with an example interest rate of 4.5% or £3150, this would equate to £60.57 per week if living off interest alone to avoid eroding the principal. If we add this to a full state pension amount this would give a weekly income of £347.08, which is still £118.92 short of minimum wage.
If the asset and savings cap is increased to £200,000, with the same 4.5% interest, this increases weekly income by £173.07. When added to the full pension amount this gives a weekly total income of £459.58, just below a weekly minimum wage.
Although this is a significant increase, the annual income it achieves of £23,898 still sits well under the maximum income level for a single person of £38,818 looking to enter the Social housing gateway.
I turn now to the Jersey Household Income Distribution Report 2021/22 that I've used to help inform this proposition.
Page - 3
P.26/2025
More than one in four (29%) of Jersey pensioners have a relatively low income, this is nearly twice the level of their UK colleagues which stands at just 15%. The report also highlights (see figure 2.9 on page 11 of the report) that there are a significant number of people who own their own home with no mortgage and have an income level that sits in the lowest quintile.
Chart 3.1 on page 12 shows 5,200 Pensioners in relative low income after housing costs, however, this needs to be adjusted to reflect those that own their own home with no mortgage. Without a concrete figure, this amendment can only put forward an estimate. This is calculated through applying the 19% from Figure 2.9 – which would give 988 pensioners who own their own home with no mortgage yet remain in relatively low income.
This proposition gives pensioners an option to sell off their home, pay off their mortgage, free up a home for the next generation all while having the ability to secure tenure in social housing and continue to enjoy a decent quality of life. This has the added benefit of working towards the Island Outcome of a vibrant and inclusive community, as identified as a key area for Sustainable Wellbeing in the Common Strategic Policy.
Should an individual decide to go down this route they will have to sell their existing home. This is not a proposition to force people to sell their homes it is simply an attempt to give pensioners currently living in poverty access to a better quality of life in their later years.
We shouldn't be frightened to be bold. We know that the Andium build programme offers capacity and quality of accommodation for islanders in this age group and means there is a great opportunity to deliver a better quality of life to our ageing population. I urge members to back this proposition.
Financial and staffing implications
The cost of making this change to the criteria is expected to be taken from the annual budget of the department as it will be part of an officer's BAU work. There may, however, need to be extra officers recruited in order to ensure requests from pensioners entering the gateway are handled efficiently.
Children's Rights Impact Assessment
A Children's Rights Impact Assessment (CRIA) has been prepared in relation to this proposition and is available to read on the States Assembly website.