Figures in respect of Short Term Incapacity Allowances

1240/5(2270)

WRITTEN QUESTIONS TO THE PRESIDENT OF THE EMPLOYMENT AND SOCIAL SECURITY COMMITTEE BY DEPUTY G.P. SOUTHERN OF ST. HELIER

ANSWER TO BE TABLED ON TUESDAY 7th DECEMBER 2004

Question 1

Further to answers provided by the President to written questions on 9th November  2004, would the President–

( a )  c onfirm that the figures provided in response to question 1(b) show a marked decrease from 18 per cent

to 6.6 per cent in those claiming a dependency increase for Short Term Incapacity Allowance (STIA) and that if this reduction were indicative of the year it would produce a saving on annual STIA spending of around £1.2 million?

(b ) explain the meaning of the answer to question 2(a) that "if the CRSP research set the level of

contributory benefits, this would mean substantial reductions in benefits" given the fact that the CRSP figures contain no housing element?

( c )  e xplain, if there is to be no connection between the CRSP minimum budget standards and contributory

benefit levels, how and when these levels were set, and whether they are to be reviewed in the future?

Answer

1. The figures supplied in the answeron 9th November2004, were basedon only onemonth'sexperienceof the new incapacity benefitsbutdid show a reduction in thoseclaimingdependency increases from 18 per cent to
   6. per cent in STIA.If this reductioncontinues,andthe future incidence ofsickness is at the sameleveland depth as that in 2003,(though it isimpossible to makesuch a prediction), the estimated reduction in the paymentofshortterm incapacity allowancecomparedtosickness benefit would be between £800,000and £900,000.However, this isnot the whole picture as the system nowallowspaymentofLTIA to thosein work.
2. The figures publishedbyCRSP were for a modestbutadequatebudgetandwerefound to belower than the standard rates ofSocialSecurityBenefits. Neither theCRSP figures nor Social Security Benefits contain an element for Housing.

H  ousing support is currently provided through other mechanisms such as the Rent Rebate and Allowance

Schemes and Welfare Grants for those in need.

3. C o ntributory benefit levels were set in 1974 and since that time have been annually increasedfirstlyby the index half waybetween the cost of living and the earningsindex and latterly from 1992by the earningsindex alone. Originally, the rates were set at the Welfarelevelexcept for the pensionwhichwasset20per cent below this figure but this was equalised in 1987. The effect of increasing benefits in this wayhas resulted in Social Security benefits outstripping price inflation and, therefore, Welfare benefit levels.

T he levels of benefit were last reviewed in the Continuity and Change' consultation in 1996 and were

generally considered to be reasonable in relation to contribution levels. At that time, no-one wanted to increase contributions to provide a higher rate of benefit, preferring to increase contributions to sustain the benefit system through the demographic period.

A s the Deputy is aware, the Committee has embarked on another Policy Review of the Social Insurance

system in Jersey' and recently presented an interim report to the States (R.C.49/2004). No doubt, as this Review proceeds, benefit levels will be discussed, amongst all the other priorities identified in that report.

Question 2

1. Will the President undertake toproduce for members estimates of the followingannual figures in January, based on the 4th quarter of 2004 –

( i)  the numbers claiming dependency increase for STIA as in question 1(b) of 9th November 2004?

( ii ) the numbers moving to Long Term Incapacity Allowance (LTIA) with wives, working and non-working,

now unable to claim dependency increase as in question 2(c)?

 ( i ii) the numbers claiming LTIA now assessed at a percentage of benefit who previously would have

claimed invalidity benefit at the full rate, and the consequent reduction in this budget?

2. Will the President confirm whetherLTIAdoesnot only apply to those with permanent loss offaculty' as implied by hisanswerto question 3(a) on 9th November2004, but to those persons who have a long-term illness and who are receiving treatment and whomay recover sufficiently to return to work?

Answer

1. The Committeewill,as a matterof course, review progressandishappy to share any statistics with interested members. The Committee will be receiving a quarterly comparison from the Department to avoid any seasonalbias. This will also include all new incapacity benefits to ensure that a full and honestcomparison can bemade,includingthosewhomay not have qualified for benefit undertheoldsystem.TheCommittee would also addat this stage that onequarter'sevidence can be superficial and will beconducting a post implementation audit after one full calendar year of operation.
2. I can donomore than quote Article 16 (1) (c) of the Law – S u bjectto the provisions of this Law, a personwho..

a s a r e s ult of the relevant disease or injury is suffering from a loss of physical or mental faculty which is likely to be permanent, and.'

s h all be entitled to long term incapacity allowance.