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Non-contributory benefit rates for 2023

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Tuesday 04 October 2022

The Committee for Employment & Social Security has today published 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.

The Committee is proposing that family allowance and severe disability benefit be increased in 2023 by 7% being the annual rate of 'core' inflation (RPIX) for the year ending 30 June 2022. The maximum rent allowances for persons in receipt of income support will also increase by 7% (from the rates that will apply until 6th October 2022) if the States approves the Committee's proposals. The Committee is proposing a 10% increase in the weekly rate of carer's allowance from £91.90 to £101.09 to provide targeted financial assistance to carers.

Following a review of income support, the Committee is also proposing a number of additional changes to income support.

The Committee is proposing that income support requirement rates be re-based. This follows research carried out last year into the Minimum Income Standard. The Committee used this research to identify goods and services considered essential to achieve a minimum acceptable standard of living in Guernsey. These 'basket of goods' has been uprated by 7% in line with RPIX at the end of June 2022. The additional annual cost of this exercise is estimated at £55,000.

This proposed change features alongside a further recommendation to remove the limit of weekly income for people living in the community who are in receipt of income support. This limit caps the total amount of weekly income that a household claiming income support can receive from all sources, including earnings and other benefits. The Committee is of the view that the limit of weekly income is not fit for purpose, is a key cause of deprivation among low-income families and has a particularly detrimental impact on children.

Deputy Peter Roffey, President of the Committee forEmployment & Social Security, said:

"Removing the limit of weekly income is a crucial step in aiding some of Guernsey's most vulnerable families, particularly children. It is unjustifiable that a limit of income is applied to low-income households which often forces them to make impossible choices when paying for the most basic day-to-day necessities like food or utility bills. The Committee is of the opinion that continuing to impose this would only serve to create severe financial hardship for some Guernsey families.

"Removing the limit will not mean that there is no cap on the amount of income support for local households. The requirement rates and maximum rent allowances will remain in place and will control the level of income support available to all claimants. In addition, income support claimants will continue to be required to be in full time work or be acting in compliance with individualised work requirements."

The Committee's proposals published today follow States Resolutions from September 2022 where the Assembly resolved to apply emergency increases to income support requirement rates, the limit of weekly income for people living in the community, and the maximum rent allowances in response to the rate at which the cost-of-living has been increasing recently. A 5% increase to these benefits will take effect on 7th October 2022. The proposals in the Policy Letter published today take into account the interim uprating measures.

The Policy Letter will be debated at the same meeting as the States' budget in November. It can be read at www.gov.gg/statesmeetings

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