Employment & Social Security has requested between £1.6m. and £3.8m. more than Policy & Resources recommended to fund an inflationary uplift in rates of Income Support and other non-contributory benefits.
But if deputies reject its request at next week’s budget debate, ESS revealed yesterday that it would immediately propose that weekly family allowance – set to be £19.20 per child next year – should be taken away from households with gross income above £98,000. The current cut-off point is £125,000.
‘This is projected to reduce family allowance expenditure by approximately £1.6m., the full amount required to remain within the funding limit available under budget option B [recommended by P&R].
‘Although the committee does not wish to take this action, it is considered the fairest approach in the circumstances,’ said ESS president Tina Bury.
The committee was determined to avoid cutting rates of Income Support and other non-contributory benefits targeted at families in the greatest need and said its preferred approach of a higher overall spending limit – set out in a budget amendment – would allow it to meet those demands without reducing the cut-off point for family allowance.
‘The amendment would protect the real-terms value of general revenue-funded benefits payable to people with insufficient income to meet their needs, people with severe disabilities, their informal carers and families with dependent children,’ said Deputy Bury.
Should the States back even tighter spending limits under P&R’s budget option A, ESS will ask for another £3.8m., and Deputy Bury said that failure to secure the uplift would result in her members going even further and making an unprecedented move to withdraw their 2027 benefits proposals altogether ‘to enable the committee to consider next steps’.
Family allowance, previously identified as a potential area for savings, emerged as one of several key budget battlegrounds yesterday when it was announced that deputies had submitted a total of 31 amendments to the States’ draft proposals for general revenue income and expenditure in 2027.
Andy Sloan will try to take the household income cut-off point for payment of family allowance in the opposite direction, increasing it from £125,000 to £136,800 from January.
Deputy Sloan insisted that he ‘recognised the importance of controlling public expenditure’ but claimed the cost of raising children had so far ‘not received sufficient recognition in Guernsey’s tax and benefit arrangements’ and criticised the attempt to freeze or reduce the family allowance cut-off point without ‘a properly evidenced policy rationale’.
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