Monday 07 October 2019
The Committee for Employment & Social Security has produced its annual report on non-contributory benefit rates.
This report covers benefits that are funded by taxation, including income support, family allowance, severe disability benefit and carer's allowance. These benefits are routinely increased in line with RPIX each year.
The June 2019 RPIX figure was 1.9%. The Committee is proposing that all non-contributory benefits are uprated by this amount for 2020, with the exception of family allowance. The Committee is still in the process of reviewing whether some of the family allowance budget could be redirected to fund services specifically aimed at children. This responds to an outstanding resolution of the States, which directed the Committee to look into this.
The Committee is also proposing to increase the income support benefit limitation from £750 to £850 per week. In most cases, the combination of net earnings and income support top-up is enough to meet a household's requirements, however, if their needs are in excess of £750 per week, their income will be capped at that amount. There are 130 families, including over 470 children, who do not have enough income to meet their weekly needs, as they are restricted by the current benefit limitation cap. This is partly due to the amalgamation of the former supplementary benefit system and rent rebate scheme, which means that social housing tenants are now charged the full standard weekly rent, and therefore require more income to meet their needs. With larger properties, where the rent is higher, it is inevitable that more families are reaching the cap.
Deputy Michelle Le Clerc, President of the Committee for Employment & Social Security, said:
"We all knew when we introduced welfare reforms in 2018 that there would be some families outside the benefit limitation cap. We will do everything we can to reduce this number as we believe it cannot be right that families are forced to live on an income that is below what the States considers to be the minimum to avoid an intolerable level of poverty. Increasing the benefit limitation to £850 will ensure that at least families with two or three children will not be limited by the cap, but there will still be 25 families with four or more children affected by this limitation."
The Committee's proposals are in line with the policy direction set by the States through the Policy and Resource Plan, and other work streams, such as those resulting from the debate on the In-work Poverty Review.
The policy letter will be debated at the same meeting as the States' budget in November.
