Income Support General Provisions (Amendment No. 5) (Jersey) Order 2011

Information about the publication of Ministerial Decisions

A formal published “Ministerial Decision” is required as a record of the decision of a Minister (or an Assistant Minister where they have delegated authority) as they exercise their responsibilities and powers.

Ministers are elected by the States Assembly and have legal responsibilities and powers as “corporation sole” under the States of Jersey Law 2005 by virtue of their office and in their areas of responsibility, including entering into agreements, and under any legislation conferring on them powers.

An accurate record of “Ministerial Decisions” is vital to effective governance, including:

demonstrating that good governance, and clear lines of accountability and authority, are in place around decisions-making – including the reasons and basis on which a decision is made, and the action required to implement a decision
providing a record of decisions and actions that will be available for examination by States Members, and Panels and Committees of the States Assembly; the public, organisations, and the media; and as a historical record and point of reference for the conduct of public affairs

Ministers are individually accountable to the States Assembly, including for the actions of the departments and agencies which discharge their responsibilities.

The Freedom of Information Law (Jersey) Law 2011 is used as a guide when determining what information is be published. While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.

A decision made 18 April 2011:

Decision Reference: MD-S-2011-0029
Decision Summary Title :	DS - Income Support General Provisions (Amendment No.5) (Jersey) Order 2011		Date of Decision Summary:	15 April 2011
Decision Summary Author:	Policy and Strategy Director		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	WR - Income Support General Provisions (Amendment No.5) (Jersey) Order 2011		Date of Written Report:	15 April 2011
Written Report Author:	Policy and Strategy Director		Written Report : Public or Exempt?	Public
Subject: Income Support General Provisions (Amendment No.5) (Jersey) Order 2011
Decision(s): The Minister made the Income Support General Provisions (Amendment No.5) (Jersey) Order 2011.
Reason(s) for Decision: The rate of GST will rise on 1 June 2011. The Income Support budget has been adjusted to compensate for this increase. The Income Support (Amendment No.6) (Jersey) Regulations 2011 increasing the household component rate with effect from 1 June 2011 were approved by the States Assembly on 6 April 2011. This Order makes changes to various incentives, as set out in the report accompanying P.29.
Resource Implications: There are no manpower implications. The complete package of increases has an estimated cost of £0.86 million in 2011 which will be met from existing cash limits. The full year cost is estimated at £1.48 million.
Action required: Policy and Strategy Director to notify the Greffier of the States and the Law Draftsman that the Order has been made and forward the signed and sealed Order to the States Greffe for notification to the States.
Signature:		Position: Minister
Date Signed:		Date of Decision (If different from Date Signed):

Income Support General Provisions (Amendment No. 5) (Jersey) Order 2011

REPORT

Introduction

The Income Support legislation requires the Minister for Social Security to bring forward any proposals to changes to the rates of components of Income Support for consideration by the States Assembly. These component rates must be reviewed at least once a year. Component rates were last reviewed on 1 October 2010 (P.77/2010) and this proposition sets out proposals to take effect from 1 June 2011.

Increase in rate of GST

The 2011 budget debate (P.157/2010) endorsed an increase in the rate of GST from 3% to 5% on 1 June 2011. It is planned that this increase should be accompanied by a compensatory increase in the Income Support budget and the value of the Food Costs Bonus (previously the GST (Food Costs) Bonus).

This proposition deals with the increase in Income Support. The increase in the value of the Food Costs Bonus will be brought to the States separately as part of the renewal of the triennial regulations which underlie that benefit.

Increasing Income Support Benefit

The Income Support benefit provides assistance towards the cost of everyday living, accommodation, childcare costs and the additional costs associated with long-term disability. Housing costs, childcare costs and the cost of GP visits are exempt from the GST and are unaffected by the increase in the rate of GST. In areas where GST is charged, the increase from 3% to 5% is equivalent to an increase of 1.94%.

Income Support benefits are calculated as a combination of component rates and incentives and disregards. As has already been indicated, it is proposed that the additional budget in respect of the GST increase will primarily be allocated to improve incentives within the Income Support system.

Earned income is incentivised within Income Support through a disregard on gross earnings. It is proposed to increase this disregard from 16.5% to 20%. It is vital that the employment of local residents is encouraged as the Island starts to move out of recession. The Department is currently investing considerable additional resources to assist jobseekers and provide appropriate work-orientated training programmes. In particular, young job seekers will receive intensive support. The increase in the incentive for earned income will help to ensure that Income Support claimants are motivated to take up all employment opportunities.

Individuals aged 65 and above are incentivised to provide their own pension through a disregard on pension income. It is proposed to increase this weekly disregard from £35.98 to £37.80 for a single person aged over 65 with a pension, and from £58.38 to £62.02 for a couple aged over 65, both receiving pensions.

In addition, the household component will be increased by 2.02% from £48.58 per week to £49.56. This component is paid to all IS claimants who occupy their own accommodation, as lodgers, tenants or owners. It is not available to claimants who live as part of another household, or who live in hostel accommodation.

The household component rate is included within the Income Support Regulations and the accompanying Regulation sets out the increased rate which will come into effect on 1 June 2011.

The value of disregards is dealt with in the Income Support (General Provisions) Order and a new Ministerial Order will be made during April, so that changes to the departmental computer system can be made at the end of April. This will allow four weekly payments (mainly made to pensioners) paid at the beginning of May to reflect the change in Income Support levels from the beginning of June.

Financial and manpower implications

The estimated cost of this package, in 2011 is £0.86 million, which is provided for in the departmental cash limits. The equivalent full year cost is £1.48 million

There are no additional manpower implications.