Jayne Ozanne will propose setting up an Essential Costs Relief Payment of up to £353 a year targeted at low-income households which fall just above the cut-off point to receive Income Support.
A similar scheme, which was included in Policy & Resources’ tax package recently approved by the States, is expected to be introduced alongside a goods and services tax in 2029, but Deputy Ozanne wants to speed up the additional assistance for low-income households and start the payments by September next year at the latest.
‘While the cost-of-living crisis impacts all islanders, it unfortunately disproportionately affects those on lower incomes as essential costs and services form a significantly higher proportion of their monthly budget,’ said Deputy Ozanne.
‘That is why they are experiencing much higher inflation than other households.
‘I firmly believe we must prioritise help to those households that sit just above the Income Support line and do so quickly.’
Prices overall rose by 4.3% in the year to the end of June, but more detailed figures released by the States showed that inflation experienced by high-income households was 4% whereas for low-income households it was 5%, effectively leaving the latter group worse off in real terms and increasing the gap between the two groups.
The Essential Costs Relief Payment could be expected to benefit between 2,500 and 3,000 households with income of less than £32,400 a year who are not receiving Income Support, at a cost to the States of less than £1m. a year, including administration of the scheme. However, those figures assume that all qualifying households would claim the relief payment, which is not the typical experience of means-tested benefits. The annual rates of payment would initially be set at £210 for a single adult and £353 for a couple. It has been estimated that just over half of those qualifying would be single pensioners and about one in five would be couples.
‘The best way to get this support where it is needed now is to use a mechanism the States has already agreed, which is why I am proposing bringing forward the concept of the Essential Costs Relief Payment agreed by the States in the tax debate just a few weeks ago,’ said Deputy Ozanne.
‘The level of relief will obviously need to be reviewed once GST is finally introduced, but at least this provides support now, and for precisely the same reasons that we have already recognised help will be needed from 2029.’
The proposal will be formally submitted by today’s 3pm deadline for amendments ahead of the Budget debate which starts on Tuesday next week.
During last year’s Budget debate, Deputy Ozanne lost an amendment for a smaller increase in fuel duty than P&R had proposed, a move which she argued would have been of particular assistance to lower-income households running a car.
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