Income Support scheme to be delivered in 2006

1240/5(2234)

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

ANSWER TO BE TABLED ON TUESDAY 23rd NOVEMBER 2004 Question

Further to oral questions asked on 9th November 2004, would the President inform members –

1. what policy changes are currently envisaged for the welfare delivery mechanisms detailed belowandwhich are to remain unaffected?
2. what assumptions have been,or will be, giventoOXERAin order that they may properly modelthecostsof benefits, for example,of the approved threetier disability system?
3. whether theCommittee accepts that the totalspentonincome support currently is accurately portrayed bythe figures in thetablebelow?
4. will the President give anassurance that the totalincome support although differently delivered in 2006, will matchthetotalbelow with appropriateuprating and indicatehowheproposes this uprating canbe achieved?

Native Welfare

Item Cost £,000 Source

Parish welfare 7,002  (2002) Report on Rel. between Parish & Exec – 2 Welfare admin.  801  (2000)  " "

Contributory benefits

Item

Old age pension

Survivors pension

Invalidity benefit

Sickness benefit

Survivor's benefit Disablement & injury benefit

Maternity Allowance Maternity grants Death grants

Social ass. pensions

Cost £,000 Source

7 1,572 E & SS Report & Accounts 2003 1 6,358

1 6,260

1 0,869

3,881

5,295

1,561

 4 18

 3 4 1

7

Total   1 2 6,562

Community Benefits and States contribution

Item Cost £,000 Source

HIE  1,072 E & SS Report & Accounts 2003 Family Allowances  4,944

Dental Benefit   1 06

Non-Cont Death   1 8

Milk   3 80

Attend. Allowance  3,290

Inval. Care & disab't  2,296 Non-native welfare  3,240 Christmas bonus  1,256 Childcare Allow.   6 89 DTA   5,988 Social Fund   1 98 65+ Health plan   3 71

Total 24,248 Housing Benefits

Item Cost £,000 Source

Rent abatement 16,205 Budget 2004 (Estimate 2003) Rent rebate  7,374

Total 23,579

Miscellany

Item Cost £,000 Source

GST compensation 9,000 –13,500 OXERA, 2002

Unemployment benefit  3,024 estimate based on contribution rate 0.35%

in RC49/2004

Total possible sum involved in all forms of income support above = £198,716,000 Answer

1. R.C. 48/2004 sets out an outline of the proposed IncomeSupportsystem, planned for introduction in October 2006. As stated in section oneof the report, the proposed newIncome Support system will replace existing means tested benefitswhichinclude welfare grants, housing andvariousnon-contributory benefits.

R .C. 49/2004 sets out some possible longer term policy directions for the Social Security contributory

insurance system which at present covers incapacity, maternity, widow(er)hood and retirement.

T he  welfare  delivery  mechanisms  listed  by  the   Deputy  include  these  contributory  benefits,  which  are

unaffected by the Income Support proposals. Only the means tested benefits will be replaced by an Income Support system.

T h e Committee is undertaking consultation at present on both the contributory and means tested systems.  It

is important to identify policies which cut across the main Social Security and underpinning Income Support systems in order to ensure they join up as a whole. As stated in Section two of R.C.49/2004 –

B  y  e n suring the Social Security system maintains wide coverage on an equitable and fair basis, the new

Income Support system can be targeted to those, who through no fault of their own, need additional help. The Committee is also mindful of the need to target additional support as fairly as possible whilst maintaining and strengthening work incentives'

2. OXERA have been givenaccesstotheincome distribution survey, budget standards, the 2001 census data and  current  information  on the  number of benefit  claimants,  including  disability  benefits.  The Initial Assumptionsgiven to OXERA include a component-basedsystem and anincometop-up that includes a pound for pound regression.DiscussionswithOXERA will continue to refine the model as theconsultation process further refines the proposals, for example on the proposed three-tier approach to the disability system.
3. The figures in the table do not accurately portray the total spentonIncomeSupport(Welfare)benefitsat

present.

T h e section headed contributory benefits does not form part of the proposed new Income Support system as

these are benefits paid from the Social Security insurance scheme to contributors.

T h e miscellany section refers to costs that do not exist at present. There is no GST payable in Jersey and there

is no contributory unemployment benefit as yet. Support for the unemployed is currently only available through the Parish Welfare Grant System, included in other sections of the Deputy 's table.

T h ere is also an omission in the figures, as the Deputy has not included the cost of educational grants made to

children over 16, still at school in Jersey.

4. I would suggest that the Deputy refers to R.C.49/2004 Policy Reviewof the Social Insurance System in Jersey', Interim Report. Section 6.2gives details of expenditure onMeansTested Benefit and WelfareGrants in 2003, that is,thecurrent Income Support' system. I doubt that it will be any lessbut until theCommittee completes its consultation, OXERAcost proposals, andthe proposed new system is approvedby the States, I cannot give such an assurance. Also,asexplained in (c) above, the total given by the Deputy doesnot accurately reflect the budgetforIncome Support. Ultimately, the new system will be approved by the States and target supportwhereitismostneeded and expenditure will bedependent on the levelofclaims.