Watershed study will put a price on Guernsey living
MAJOR reforms of Guernsey's welfare system are on the agenda.
MAJOR reforms of Guernsey's welfare system are on the agenda.
And one of the biggest challenges will be trying to garner cross-society support for the plans that could end up not only costing more, but may also disadvantage some who are already struggling financially.
The first step in the programme of reform is aimed at revising the system that helps people pay their rent both in the private sector and in social housing.
If accepted, it will eliminate some duplication - currently Housing assesses its tenants using one example of means testing, the rent rebate scheme; Social Security assess those it helps through another example, supplementary benefit.
It will also eliminate inequality which has left some in social housing arguably getting too much money and those in the private sector too little because a benefit limitation cap bites.
Underpinning it all will be a watershed study, which will for the first time work out what the minimum level of income someone needs in Guernsey to live on.
Social Security and Housing, with the help of UK social scientists, will produce minimum income standards for the island.
Income support from the States is all about bridging the gaps between what people bring in compared with what they need to live on.
Currently, deciding that level of need is partly art - the study will make it much more of a science.
The study will attempt to reach a wide cross-section of society as it tries to work out what is needed so a rounded picture is gained. It will also use proven research that is as detailed as saying, for example, that a family needs seven apples a week.
The Green Paper produced by the departments for July's debate spells out a replacement system for rent support that would be more sophisticated - or complicated, depending on how you look at it.
It would introduce a maximum rent allowance.
Everyone would be assessed under this scheme, which would be able to take into account different people's circumstances, so a single parent with one child would get a different level of rent support than a family with three.
And it would not matter which sector of housing they are in.
Currently, supplementary benefit stops helping people when their income exceeds the £405 benefit limitation, but it is possible to be a social housing tenant with a family and a household income of £785 and still be entitled to a rent rebate.
Any changes will be phased in to give time for those most disadvantaged.
And there needs to be care taken to ensure that private landlords do not take advantage of the new system by hiking up their rates, although this is something the department's do not think will be an issue.
What if the minimum income study came up with a figure that was unaffordable for the States?
It will take some explaining to the public to reject the level coming out of the investigation and set it lower, but with public finances under scrutiny, it might just be what the States and the departments have to do.
In 2010, the States spent £17m. on supplementary benefit and £10m. on rent rebates.
These are by no means small figures and the exact impact of changing rental support is not yet known accurately - and will not be until the minimum income standards are finalised, although it will cost more than is currently spent.
But there are other moves on the horizon that will, we are told, produce some savings.
Proposals are on the way for work incentivisation, which will be reported at the same time as the White Paper for rent reform in December.
Those who hold the States purse strings sound a note of caution in comments on the report, one that makes it clear that other areas of spending will suffer.
Treasury noted that the proposal could have 'significant future cost implications for the States'.
'These will need to be considered alongside competing requests for the limited funding available. The department would like to draw attention to the fact that any above-inflationary increase in the benefit limitation for 2012 will affect the funds available to other States departments and committees,' the Treasury and Resources Department said.
It wants all funding decisions taken together in December during the Budget debate, not piecemeal.
This is a potential flashpoint because Social Security's annual uprating report is normally debated in September and it wants an above-RPI rise in the benefit cap to help those immediately who are struggling because of it, as well as smoothing the transition to the new rent support scheme.
The end of the year is set to be one of big decisions and whether deputies have the stomach to keep spending on target with an election around the corner will be a key test.
