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How long will Jersey's three key benefit funds last?

How long will Jersey's three key benefit funds last?

Wednesday 07 June 2023

How long will Jersey's three key benefit funds last?

Wednesday 07 June 2023

New reports have shed light on when funds which dispense money to islanders requiring support in old age, ill-health and other times of need are expected to run out.

Insurance experts have reviewed the Social Security, Health Insurance and Long-Term Care Funds, producing three reports which were unveiled by Social Security Minister Elaine Millar this afternoon.

The Government said today that, based on the reports, each of the funds is in a good position – but inward migration remains a key issue for the future.

Here's what the reports had to say on each fund...

Social Security Fund

What it's used for: Old-age pensions and support for those who are ill, lose their jobs or are caring for family members.

Value: The fund was shown higher-than-expected balance of £2.3billion at the end of 2021, with improved projections since it was last reviewed at the end of 2017.

Current status: It is expected that the Social Security Fund will be able to pay benefits for "at least several decades" after its investment performance was better than in the previous review, the authors said.

The reviews show the effect of net migration on the ability to pay benefits in the future. A net figure of nearly 700 people per year would be required to maintain the Social Security Fund at its current level, while a net figure of zero would see the fund empty by 2066, and 325 migrants per year would see the fund empty by the early 2080s.


Pictured: The Social Security Fund Balance over the next 60 years. 

Migration is an ongoing hot topic for the government, which is currently developing a population policy. Earlier this year, it was shown that Jersey's ‘dependency ratio’ – the number of pensioners per 100 working-age people – had increased to 52%.

See the full report here.

Health Insurance Fund

What it's for: subsidising services provided through GP surgeries and community pharmacies, including free prescriptions.

Value: The value of the fund has increased from £93m to £103m over the last four years, although the experts' forecast is that this figure will decline over the next two decades as a result of Jersey's ageing population.

Current status: The review of the Health Insurance Fund shows that if benefit levels remain at current levels, the fund's balance would fall to zero within the next 15 to 20 years, highlighting the need for the government to identify a policy for sustainable funding for health and social care.

Deputy Millar said: "Despite unanticipated disruptions over the last few years, both the Social Security and Health Insurance Funds remain in a good position.

"These reviews will feed into our strategic policies when considering access to healthcare and our ageing population, to help ensure support is in place for Islanders for many years to come."


Pictured: Net migration over time. 

Assistant Treasury Minister Steve Ahier said the reports would "inform ministers and other States Members on the decisions for the next Government Plan and help implement a roadmap for sustainable financing of our future healthcare and social provision".

Full report here.

Long-Term Care Fund

What it's for: Providing benefits to those with long-term care needs.

Value: The fund has grown since the States Assembly raised the long-term care contribution rate by 0.5% to 1.5% in 2020. At the end of 2021, it stood at £44m.

Current status: The government said that as a result of this increase, the fund was in a significantly better position with a more positive outlook than at the time of the previous review.

The experts' projections show the fund balance growing until 2030 and then decreasing gradually to zero by 2042.


Pictured: The projected Long-Term Care Fund over time.

Deputy Millar said: "I am pleased to say that, as anticipated, the Long-Term Care Fund has grown since the last review and will continue to grow for the next seven years.

"There is no need to increase the contribution rate again now, but the timing of any future increases will be important, to make sure they are fair to future generations."

See the full Long-Term Care Fund report here.

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