Application form IS.01T and the minimum wage

1240/5(3180)

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

ANSWER TO BE TABLED ON TUESDAY, 30th JANUARY 2007

Question

1. F u rthertohisresponse to an oral questionon 16th January 2007, would the Minister inform members whether the Data Protection Commissionerwasasked to commenton the questions contained in the application form IS.01T or only on the statement in Section K?
2. W  ould the Minister explain whyothermembers of a household are requiredto declare assetsworthover £1,000 and can he confirm that this request doesnotbreachprivacy rights?
3. W  ould the Minister inform memberswhether the new scheme will removethe disregard onincome from the Therapeutic WorkSchemeand, if so, explain whether this will remove the incentive for this return to work scheme?

Answer

1. T h e Data Protection Commissionerwassent a copy ofthe whole form with anexplanationasto the purpose, derivation anduseof the data. MyDepartment asked for comments on the declarationas well as any other issues ofwhichitshould be aware.
2. In c omeSupport is to bebasedonthehouseholdunitandis claimed byanadulton behalf ofallmembers of theirhousehold. The rateof benefit willbebasedoncomponentsrelating to themembersof the householdand the totaloftheincome and assets of all membersof the household. I cannotseehowany privacy rights are beingbreachedifthe claim is beingmadeonbehalfof all membersofthehousehold.
3. C u rrent disregards and limits onearnings lead to disincentives and this can be particularly relevanttothe Therapeutic WorkScheme(TWS)where disincentives exist for theemployee. Under Income Support, the complete disregard will beremoved.Income Support will work in a different way and incentives will be given  to  retain  earnings rather than  benefits  and  therefore not  only  will  there  be a  disregard of a proportion ofearningsbut individuals willalsobe able to earnabovethe current TWSlimitand still receive Income Support.

Question 2

Does the Minister support the Employment Forum's recommendation of 40% of average wage as the standard for the minimum wage and, if so, would he explain why? Has the Minister undertaken any comparison to show how this figure compares with other minimum wage standards in Europe and, if so, would he provide details to members?

Answer

The Minister accepts that in its review of the minimum wage, the Employment Forum has taken into account the impact on local businesses and economic advice regarding inflation targets for the Island and supports the Forum's recommendation of 40% of average earnings as the standard for the minimum wage, at this time.

The Minister understands from the Forum's recommendation that the figure of 40% of average earnings is not fixed for future upratings beyond 2008, and supports the Forum's recommendation that after the 2008 minimum wage rate has been set by the June 2007 average earnings data, the appropriateness of this method and the percentage of average earnings used in the formula will be reconsidered by the Forum.

In the absence of up to date figures regarding median earnings, the Minister recognises the Forum's reasoning for applying a regularly reviewed index that can be relied upon for release in June each year.  The responses received by the Forum demonstrated that being able to plan prices and wage costs a year in advance in advance is crucial for the sustainability of some industries.

In comparing the recommended minimum wage figure with standards in Europe, the table below is of assistance, which presents the minimum wage as a proportion of average monthly gross earnings since 1995. The information has been sourced from the The European Industrial Relations Observatory (EIRO), which is a monitoring instrument offering analysis of European industrial relations.

The minimum wage rates referred to in the comparison table mostly relate to the adult minimum wage for employees over the age of 21 and lower minimum wage rates are payable to younger employees, whereas Jersey's minimum wage relates to all employees from the age of 16.

Minimum wage as % of average gross wage

Source: EIRO.