The Employment & Social Security committee wants to increase the benefits cap on families from £750 to £850 per week.
Deputy David De Lisle has highlighted that this would be a yearly sum of £44,200, when the median annual salary in the island is £33,530.
He wants a system where more people are motivated to work.
‘In the UK the government has struggled with the tight work situation and the benefits trap.
‘They reduced the benefits cap to get people off benefits and into work.
‘In Guernsey, the whole benefits system appears to be going the other way.
‘Instead of working to wean people off benefits – social security is working to put more people on income support at increasing social cost to the taxpayer.’
Also flagged up is that Guernsey’s benefits system is much more generous than in London, which has a similar cost of living.
In London, the family benefits cap sits at £442.31 per week (£23,000 a year); outside London it is £384.62 per week (£20,000 per year).
In 2018, income support was introduced in Guernsey as a new amalgamation of the supplementary benefit and rent rebate systems. It meant that social housing tenants now pay the full standard rents, and Deputy De Lisle said the new set-up had denied people their aspirations.
‘That move has put more families on income support – the old supplementary benefit – and took away the hope of many housing tenants ever getting into private sector housing and out of States housing.
‘Another 929 tenants were placed on income support, costing the taxpayer an additional £4m. a year.
‘This year another 130 families and still more are in poverty. All because of the change to income support.
‘This change has cost taxpayer not only £4m. a year but added amounts to bail out families thrown into poverty.’
The Employment & Social Security committee wants to increase the benefits cap to help the 130 families it has identified as living in ‘intolerable poverty’ and having to make difficult daily choices, such as whether to put food on the table or heat their homes.
In those 130 families there are more than 470 children who are living in poverty.
The cost to the taxpayer of increasing the benefits limitation to £850 would be £275,000 per annum.
In the UK, when the benefits cap reached £500 per week there were concerns it was being abused.
That led to a reduction by the Conservative government in order to encourage people back to work and inspire entrepreneurship.