ESS wants £3.5m. interim pensions and benefit boost
PENSIONS and income support could be in line for an unexpected boost worth about £3.5m. in the second half of this year.
Employment & Social Security will ask the States to back an interim increase of 2.9% to a range of social benefits between July and December.
It said the unusual mid-year uplift was needed to assist thousands of less affluent islanders facing the highest increase in prices for decades.
But Policy & Resources wants deputies to throw out the proposals and instead hold pension and benefit rates at their current level to avoid additional costs to the States.
‘This is to ensure that all benefits – such as pensions, carers’ allowances, income support and so on – keep pace with inflation. If they don’t, their spending power is reduced and the recipients become poorer,’ said ESS president Peter Roffey.
‘If we leave benefit rates unchanged throughout this year, everybody in receipt of any sort of benefit is going to be significantly worse off.
‘ESS does not believe this is morally defensible and we hope the majority of States members will agree with us.’
If the proposals are approved, the full States pension will go up by £7.26 to £257.48 a week from 3 July until 31 December. This would cost about £2.25m.
Increasing other benefits funded from social security contributions – such as incapacity benefit, bereavement benefit, maternity benefits and States’ residential and nursing care payments – would cost about £700,000.
Raising benefits funded from general taxation – such as income support, family allowance and carer’s allowance – would cost just over £500,000. The one-off increases would last only six months and would not affect the annual uprating of pension and other benefit rates from January 2024.
P&R said the proposed across-the-board mid-year increase would put too much pressure on States’ finances.
In a letter to ESS, P&R president Peter Ferbrache said: ‘P&R is concerned that many of the proposed uplifts are un-targeted, although you have stated that the reason for the proposed uplift is that the unusually high levels of inflation are affecting the cost of living and most severely impacting the poorest households in the community.
‘While we accept this argument in relation to income support, P&R feels much of this very considerable expense will not reach low-income households, and in some cases will not benefit households at all.
‘Therefore, due to the level of unplanned expenditure, the current States’ financial pressures and concern centred on the beneficiaries of all the proposed uplifts, the P&R is of the view that this proposal should not be approved at this time.’
The debate is likely to be scheduled for the States meeting which starts on 26 April.
