Long-term care contributions
A long-term care fund has been set up to help those who need long-term care.
Every insured person who pays income tax pays into the long-term care fund with a long-term care contribution.
If you're not liable for income tax, you won't have to pay the contribution but you can still get support from the fund for your long-term care costs.
The States of Jersey will also contribute into the fund each year.
Long-term care scheme: benefits
How much you pay
If you have a tax bill then you will also have a long-term care contribution to pay.
The maximum long-term care contribution rate started at 0.5% (2015) of your total taxable income and then increased to 1%, but most people will pay less than this.
This works in the same way as income tax where the standard tax rate is 20%, but most people pay less than 20% tax on their annual income.
Your contribution is based on your total income but will take into account the allowances and reliefs you benefit from for tax.
Marginal relief calculation of personal tax
Examples comparing the maximum contribution with the actual amount after deductions are taken into account
| Household | Income | Maximum long-term contribution (0.5% in 2015 and 1% in 2016) | Actual long-term care contribution per year | Actual % of total income |
|---|
| Single | £16,000 | 2015 | £80 | 2015 | £13 | 0.08% |
|---|
| 2016 | £160 | 2016 | £23 | 0.15% |
| Single | £30,000 | 2015 | £150 | 2015 | £104 | 0.35% |
|---|
| 2016 | £300 | 2016 | £205 | 0.68% |
| Single | £50,000 | 2015 | £250 | 2015 | £234 | 0.47% |
|---|
| 2016 | £500 | 2016 | £465 | 0.93% |
| Single | £70,000 | 2015 | £350 | 2015 | £350 | 0.5% |
|---|
| 2016 | £700 | 2016 | £700 | 1% |
| Married / civil partnership | £30,000 | 2015 | £150 | 2015 | £20 | 0.07% |
|---|
| 2016 | £300 | 2016 | £35 | 0.12% |
| Married / civil partnership | £50,000 | 2015 | £250 | 2015 | £150 | 0.3% |
|---|
| 2016 | £500 | 2016 | £295 | 0.59% |
| Married / civil partnership | £70,000 | 2015 | £350 | 2015 | £280 | 0.4% |
|---|
| 2016 | £700 | 2016 | £555 | 0.79% |
| Married / civil partnership | £120,000 | 2015 | £600 | 2015 | £600 | 0.5% |
|---|
| 2016 | £1,200 | 2016 | £1,200 | 1% |
To find out more about how the long-term care contribution is calculated, you can find more detailed examples in the document below.
Download long-term care contribution 2015 calculation examples (size 359kb)
Download long-term care contribution 2016 calculation examples (size 359kb)
Upper income limits and long-term care contributions
Unlike income tax, an upper income limit will be taken into account when calculating your long-term care contribution.
This means the maximum long-term care contribution for an individual is:
- £798.12 (0.5% of £159,624) in 2015
- £1,625.04 (1% of £162,504) in 2016
How your contribution is collected
Your contribution is calculated by the Taxes Office and is collected in the same way as your income tax. There are no extra forms and the amount is shown separately on your tax bill.
If you pay tax by deduction from your earnings, your rate will include both your income tax liability and your long-term care contribution.
If you pay income tax directly, the long-term care contribution is included in the amount you pay.
Calculation of rate
The combined effective rate is the sum of:
- the effective rate calculated in accordance with the relevant part of the income tax law
- the LTC contribution effective rate calculated with the relevant part of the social security law
rounded up to the nearest whole number.
LTC contribution rate formula
L is the sum of:
- your estimated LTC contribution for the payment year
- any unpaid LTC contributions for previous years
I is the sum of:
- all your taxable income for the year of assessment
Less:
- your allowable employment expenses and pension contributions for the year of assessment
The sum of 'I' is also modified by the relevant articles of the income tax law, to take into account provisional rate and new taxpayers calculations.
Calculating your tax rate (deduction from earnings)
Where your contribution is going
Your contribution goes into a separate fund which can only be used to pay long-term care benefits.
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