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1240/5(3802)
WRITTEN QUESTION TO THE MINISTER FOR SOCIAL SECURITY BY DEPUTY G.P. SOUTHERN OF ST. HELIER
ANSWER TO BE TABLED ON TUESDAY 1st APRIL 2008
Question
Given the Minister for Treasury and Resources' stated intention to link the 2009 States' employees' pay awards to his new RPI(Y) inflation measure, which does not include taxation changes and will therefore be lower than the actual rise in the cost of living given by RPI, and following the development of RPI (pensioner) and RPI (low income) measures, what measures does the Minister propose, in conjunction with the Minister for Treasury and Resources if necessary, for the indexation of a) pensions and b) other benefits in 2009, and why?
Answer
Members will be aware of the written question answered on 26th February 2008, which contains all the information requested in this further question.
For the sake of clarity, that answer is repeated:
- " T h ere are noplanstoalter the statutory provisions set out at Article 13of the Social Security (Jersey) Law 1974which provides for the automatic uprating of all contributory benefits (including pensions)by the Jersey EarningsIndexannually. Since 1990, theAverage Earnings Indexhas increased at an average annual rate about 1 percentage point greater than that of the RPI. The graphbelowplotsthetwo indices since 1990.
Source, Jersey Economic Digest 2007
Members will be aware that the UK government, as part of their pension reform programme, have introduced the Pensions Act 2007 which includes a commitment to link the annual increases in state pension with earnings rather than prices, as has been the case in Jersey for many years. The UK government hope to achieve this by 2012.
From time to time, the increase in RPI is above that of average earnings – this has happened 4 times in the last 17 years. These occasional anomalies do not detract from the general principle that contributory benefits should be linked to wages, and that this automatic link has been of great benefit to pensioners since it was introduced.
- Members will alsobeaware that under the IncomeSupport(Jersey)Law2007anannual review of rates has to becarried out. In reviewingthese rates statutory provision provides that regard shallbegiven to changes in the cost of living andin the general standardsof living ofthecommunitytogether with other factors that the Minister considers relevant. The component rates in Income Support are set under Regulations and the Minsterwillprovide full details to the Assemblyof the basis for any amendmentsto rates when the Minister brings forward a proposition on the annualreview."