Availability of income support to those in the second and third quintiles

1240/5(3073)

WRITTEN QUESTION TO THE MINISTER FOR SOCIAL SECURITY BY DEPUTY G.P. SOUTHERN OF ST. HELIER

ANSWER TO BE TABLED ON TUESDAY, 7th NOVEMBER 2006

Question

Following his statement, on 24th October 2006, during the debate on proposed exemptions to the new Goods and Services Tax that Income Support would not only cater for those in the bottom income quintile but might even extend to assist those in the second and third quintiles, would the Minister inform members –

( a ) what evidence he has in terms of numbers of recipients and income levels, based on current calculations,

to support his statement?

( b ) w h e ther he has yet considered the figures set out in Section 5 of the Interim Scrutiny Report on

Goods and Services Tax (SR 6/2006 presented to the States on 18th October 2006) showing the impact on GST on different quintiles and, if so, whether he concurs with the Sub-Panel's conclusions?

( c ) w h e ther income support will require additional funding if it extends across the quintiles as indicated

above?

( d ) why he chose to introduce this information on quintile spread' of income support in the debate and did not provide this information in prior discussions with the Income Support scrutiny Sub-Panel?

Answer

1. The precise numberof recipients ofIncome Support and their spread across theincome quintiles isunknown at themomentbutmyDepartmentis currently collecting data which will provide the information to allow this to be determined.

T  he evidence on income levels is available from the Household Expenditure Survey, which sets out the

income bands for the quintiles and it is these that I quoted. Beneficiaries of the existing benefit schemes can be found in the bottom three quintiles of this income distribution, and on this basis, Income Support, can conceivably, extend similarly.

2. I havenotanalysedthe figures in section 5 of the interim Scrutiny Report fully, however I doconcur with the Scrutiny Panel's conclusion that "Clearly Income Support will be far more significant for low-income families than zero-rating."
3. For the avoidanceof doubt, the spread acrosstheincome distribution only occurs because of the differing circumstances andtherefore different costsof different families. Not every householdinthelowerquintile will receive income support, but a large number will. Similarly only a smallnumberofhouseholds in the third quintile are likely to qualify for Income Support. I amnotsure whether this questionconcerns the whole costofIncomeSupport or the support givenagainst the introduction ofGST.

I n the case of the effects of GST, I have the assurance of the Minister for Treasury and Resources that those

on Income Support will be insulated from the effects of GST by funds being made available equivalent to those effects.

I n the case of the Income Support system itself, given the inequities and disincentives of the existing benefits,

it is clear that the system will allow those in greatest need to receive greater support.

4. The quintile spreadwaspublishedin the Household Expenditure Survey and all I have simply done is equate

the quintile boundaries to existing and likely potential beneficiary incomes. My statement was merely an effort to

show how income support can provide support for households depending on household circumstances.