By a majority, the committee is opposed to the proposal to exempt unearned income from social security contributions for those islanders who are both employed and under the state pension age.
This proposal from Policy & Resources will mean the loss of £5m. of annual income compared to the previously approved fiscal package.
But ESS president Deputy Tina Bury said her committee is equally worried about fairness.
‘We remain committed to a progressive restructure of the social security contribution system.
‘It therefore won’t be surprising that the majority of us were disappointed to see P&R’s proposals drop the element of the previously agreed plans relating to unearned income – for instance bank interest, rental income or dividend income.
‘These proposals would have ensured everybody’s contributions were based on their total income, not just earnings.
‘This would, in the committee’s opinion, make the system equitable for all.’
Under the new proposals from P&R, only islanders who are ‘non-employed’ will have to pay contributions based on their total income.
That includes everybody over the state pension age because they are automatically deemed to be non-employed, whether or not they are actually in employment.
P&R president Deputy Lindsay de Sausmarez said she can fully understand ESS’s stance in principle, but that her committee’s engagement with business groups had flagged up concerns about the possible impact on the private rental market if they pressed on with the plan to include unearned income.
Meanwhile, despite their disagreement, ESS is not planning to place an amendment during next month’s tax debate but to address it through a separate route instead.
‘The committee has this morning [yesterday] decided that it will not be laying an amendment to the policy letter but will continue to consider whether this piece of work is something it will bring to the States independently, in due course,’ said Deputy Bury.