Monday 09 September 2019
The Committee for Employment & Social Security has produced its annual report on benefit and contribution rates. For the second year, the Committee has produced two reports on benefit rates.
This first one concerns contributions and benefits funded from social insurance contributions and will be considered by the States at its meeting on 16 October. The second report concerns benefits funded through taxation, and will be published at the end of September, for debate at the same meeting as the States' Budget in November.
The full rate of old age pension is proposed to increase by £5.22 to £222.58 per week. For the most part, benefit rates are proposed to increase by 2.4%, as the policy is to uprate by RPIX (1.9%) plus one third of the difference between RPIX and annual increase in median earnings (3.3%). This means that pensions, and other benefits, will keep in line with the rising cost of living.
From 2020, the pension age will start increasing until it reaches age 70 in 2049. This will take place at a rate of increasing the pension age by two months every ten months. This means that individuals who turn 65 between 1st January and 31st October 2020 will have to wait an extra two months before receiving their old age pension. The increase in pension age will help to slow the decline of the Guernsey Insurance Fund as the population ages and people live longer into retirement. Those reaching pension age in 2020 have been informed of how the change in pension age will affect them.
The Committee is proposing that old age pension is renamed 'States pension' from January 2020. This decision is in response to some complaints and comments that had previously been received about how outdated the title was.
Deputy Michelle Le Clerc, President, Committee forEmployment & Social Security said:
"We believe that the new title is more modern and inclusive, and reflects that it is a pension related to social insurance contributions made to Social Security, rather than private or occupational pension, or the forthcoming secondary pensions scheme."
The Committee is also proposing the standard annual increase in the prescription charge, for those who are not exempt from paying it, taking it from £4.00 per item to £4.10 from 1 January.
The Committee's proposals are in line with the policy direction set by the States through the Policy and Resource Plan.