Thursday 04 May 2023
The Committee for Employment and Social Security has submitted a policy letter seeking States support for an interim increase in income support rates.
This follows the narrow defeat on 27th April 2023 of the Committee's proposals for an interim increase in the rates of most benefits. Following debate, an equal number of Members voted in favour of the proposals as voted against them, meaning that the proposal was not approved.
The Committee remains strongly of the opinion that, following an exceptional period of high inflation that has put a significant amount of financial strain on low-income households, it is necessary to implement interim uprating measures in respect of all contributory and non-contributory benefits. However, the Committee has listened to feedback from States Members, including from members of the Policy & Resources Committee, who have expressed a preference for a targeted approach to increasing benefit rates.
Therefore, the Committee is proposing that an uplift of 2.9% be applied only to the income support requirement rates, limits of weekly income, personal allowances, and maximum rent allowances with effect from 11th August 2023. This is the rate of "core" inflation (RPIX) from 1st July 2022 to 31st December 2022. The most recent increase in benefit rates, applied in January 2023, was based on inflation as at 30th June 2022. Therefore, the current rates of benefits and allowances do not take into account the inflationary increase in prices since that time.
If approved, the Committee's proposals will have a one-off cost of approximately £515,000, significantly less than the overall cost of the proposals that were rejected by the States at the April meeting.
The proposals are an interim step between the ordinary uprating of all benefits and associated rates that took effect in January 2023 and the rates that will be proposed to take effect from January 2024. As per usual, the proposals for January 2024 will be brought to the States for debate later in the year.
Deputy Peter Roffey, President of the Committee for Employment & Social Security, said:
"The proposals in this Policy Letter aim to direct assistance at low-income households to help relieve the continuing financial pressures placed on them by unusually high levels of inflation. Whilst we were disappointed by the outcome of the recent States debate, the Committee has taken on board feedback expressed during the States debate and has quickly worked up a new, more targeted approach. I hope this will be a more acceptable approach for those members of the States who were concerned that the Committee's original proposals would benefit some people in receipt of contributory benefits who were not in financial need.
I encourage anyone who is struggling to make ends meet to contact Employment & Social Security on 01481 222500."
