Monday 09 October 2023
The Committee for Employment & Social Security has 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. These benefits are routinely increased in line with the rate of core inflation (RPIX) each year.
The Committee is proposing that non-contributory benefit rates are increased in early January 2024 by 6.8%, in line with RPIX for the year ending 30th June 2023. In respect of income support, it is proposed that this increase be applied to requirement rates that applied from 6th January 2023 to 10th August 2023, rather than the interim rates which came into force on 11th August 2023. The proposed 2024 rates are in the region of 3.8% higher than the rates which currently apply.
The Committee also intends to adjust the point at which a parent in receipt of income support who is primarily responsible for childcare is required to work part-time (a minimum of 20 hours per week) to when their youngest child turns three. Currently, these parents are required to work part-time once their youngest child turns five. Income support offsets the cost of childcare against a person's earnings. Claimants are responsible for paying for childcare, but the costs are factored into the income support means-test.
Deputy Lindsay de Sausmarez, Vice-President of the Committee for Employment & Social Security said,
"Although the Committee appreciates that it's a perfectly valid choice for parents to leave the workforce to fulfil childcare responsibilities, the current system of financial support enables some eligible parents to leave the workforce for longer than the majority of working age parents who do not receive income support, which the Committee thinks is unfair.
This change also aims to bolster the workforce and will potentially lead to more children benefiting from extended pre-school education and all the associated educational, developmental, and social advantages."
To provide parents with adequate notice, the Committee intends to implement this change from 1st September 2024.
The Committee is also proposing to increase the amount of carer's allowance that is disregarded when calculating entitlement to income support from £40 to £50 per week. This ensures that increased financial support for carers is targeted towards lower-income households.
The policy letter is available on the webpage for the States meeting on 7th November 2023.