Health Insurance Exception Income Allowances and Invalidity Benefits

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

ANSWER TO BE TABLED ON TUESDAY 31st JANUARY 2006

Question

Would the Minister inform members –

( a ) w h e ther, in October 2005, Health Insurance Exemption (HIE) income allowances were up-rated in

line with the RPI (3.6%) whereas Invalidity Benefits were increased in line with the average earnings index (5.3%), and whether this resulted in a number of recipients being rendered ineligible for HIE?

( b ) w h e ther this process has had any effect on those who have high medical costs due to their incapacity

and, if so, to what extent?

( c ) of the figures for percentage increases in HIE income allowances and Invalidity benefits for the past 5

years? and,

( d ) what measures, if any, will the Minister take to ensure that the methods of increasing HIE income

allowances and Invalidity Benefits outlined in (a) above are reviewed, or, if appropriate, amended –

(i ) in th e short-term under the current system?

 ( ii )  in th e long-term under the changes proposed in the income support scheme? Answer

1. The rates of all benefits are reviewed annually in October.SocialSecurityInsurance Benefits, such as pensions and incapacity benefits,were increased by5.3% in 2005 and some non-contributorybenefits such as AttendanceAllowance increased by 4.45%. The Parish Welfare rates were increased by3.6% and itis these that determinethe basis of the HIEincomeallowances.However,it should benoted that the HIE assessment ofmeans involves certain benefit disregards and allowances which, being basedonpercentages, are automatically increased in October as well.Therefore, although it ispossible,theincrease in anyone benefit is unlikelyto be the prime (or sole) causeof HIE claimantsmovingovertheincome level.
2. The HIEincomeallowancesaresetat approximately 20%abovethe Welfare rates. Where someonemoves over theincomeallowances,an additional 5% discretion on their total allowances can beapplied.The actual difference to the respective rate equates to £2.70 eachweek,butthe discretion would be a minimumamount of £7.07 and, because it is applied to all allowances,is normally more. Further, States Fundedbenefitssuch as AttendanceAllowanceand Disability TransportAllowancewhichmitigate the addedcostof disability are totally disregarded and act as a buffer against the potential fallofincomedue to loss of benefit.

T h e Department would welcome any examples of difficulties caused by the loss of HIE to compare with data

it now holds on individual HIE/ and non-HIE attendances by General Practitioners. The clear objective is that cost should not be a barrier to proper and necessary medical services.

3. The rates used over the last five years are as published by the Statistics Unit - Jersey Index of Earnings Jersey Retail Price Index

% %

8.10 3.90

4.20 4.20

4.70 4.20

3.30 4.80

5.30 3.60

H owever, it should be remembered that these are two separate systems, each of which have different

purposes. The Social Security scheme through pension and certain Incapacity Benefits is replacing earnings and so this benefit is uprated by the Earnings Index to ensure that parity is maintained with workers.

T h e HIE scheme, like the Welfare system, is part of the ultimate safety net and therefore is calculated around

the amount required for living. Therefore, the Retail Price s Index is the more appropriate Index to use to uplift any benefit rates.

4. (i) as there is only one more benefit upratinginOctober2006beforethe Income Support system is introduced, we have noplansto review the current systemofuprating. Further, nobudgethas been allocated toincorporate any extensionto the HIE scheme for this year.

( ii ) in the longer term, Incapacity Benefits, (which are outside of the Income Support system), will continue

to rise with the Earnings Index which is generally the higher index. HIE will cease to exist as a separate benefit and the Income Support components will be reviewed at least annually with due regard to economic circumstances. However, the new Income Support system will not have thresholds which can cause all or nothing' effects such as the ceilings and income bars that exist in current systems. So, in short, the States have already agreed this principle in the Income Support proposals and the proposals to increase subsidies to those with chronic illnesses through the Health Insurance Scheme.