Changes to Benefit payments for Short and Long Term Incapacity Allowances

1240/5(2357)

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 15th MARCH 2005

Question

1. C o m parative 4th quarter figures releasedby the Committeeonshort term incapacity allowance(STIA) 2004, and sickness benefit 2003, show a 7.7% dropinthenumberofclaims.Similarlythe figures for long term incapacity allowance(LTIA)and invalidity benefit show a 16% reduction. Will the President inform membershowthetotalpaymentsforthesetwo benefits have changedin absolute andpercentageterms?
2. T h e numbersof claims involving a dependency-increase' for short-termandlong-term illness over the same period have reduced from 1306 to 183and from 45 to 7, respectively, a reduction in both of85%. Will the President inform memberswhat the reduction in the overall dependency payments in absolute terms has been between the twoquarters for thesetwo types ofbenefit?
3. W ill the President inform members what the Department'sestimateofsavingto its budget is, that may ensueover the first and subsequentyears from the introduction in the new STIA and LTIA resulting from the Committee'schangeto the treatment of dependency?

Answer

1. T h e Deputy has been warned in previousanswersaboutcomparing benefits overthe relatively short period ofonequarter.For the sakeofcompleteness,itneeds to be explained that thenumbersof claims are functions ofthe incidence of illness and accidents, the persistence of the incapacity and indeed the overall churn of medical certification from G.P.s. A full review will be undertaken after a year of experience with the new benefits even thoughinSocial Security terms this is a short period. Againto help Deputy Southern , I can say that in the 4th quarter of 2004, thetotalcostof incapacity benefit payments was £9,291,195.45, and in the 4th quarter of 2003 itwas £8,553,006.66. Theincrease is 8.63%. As a direct answerto the Deputy 's question, STIAin the 4th quarter of 2004 amountedto £3,051,830.05 and Sickness Benefit in the 4th quarter of2003amounted to £2,972,876.89,anincrease of 2.65%.
2. T h e cost ofbenefits with a dependency increase for long andshortterm incapacity casesinthe 4th quarter of 2004 was £2,644,865.25 and inthe4th quarter of2003 it was £2,960,693.71.The decrease is 10.67%.
3. A s these benefitsare funded from the SocialSecurity Fund, there is no general revenue budget saving. The Committee is required by Lawto have an Actuarial Reviewof the financial status of the Social Security system everythree years. The next triennial reviewisabouttobepublished and account of the changes in contributions and benefits between 1997 and 2004 have been catered for in the forward projections. This includesthe changes to incapacity benefits. Themove to individual entitlements within the system began in the 1980's as countries took stock of human rights, gender neutrality and international directives,which,not binding on Jersey, the Committee and the States at the time believed should, nevertheless, apply to Jersey. Over time moving to a totally gender neutral system of individual entitlement is cost neutral.