Both social security Contributions and Benefit payments have had annual increases approved by the States of Guernsey.
As part of a decade-long plan for both, Guernsey Insurance Fund (GIF) contributions will be increasing by 0.1% for both employees (up to 7.5%) and employers (up to 7.1%) from January.
An increase on the earnings and income limits (which are used to calculate contribution amounts) was agreed at 4.2%.
Deputies also agreed that next year there will be no increase to the contribution rates for the Long-term Care Insurance Fund (LTCIF).
However, the amounts individuals pay towards bed-based long-term care, for accommodation and living costs will be increasing twice next year.
Currently this sits at £361 per week, but that will increase to £396.76 per week from 5 January, and up to £424.61 from 6 July.
Although the contributions are increasing, people who receive benefits will receive a higher rate to compensate. That includes the States Pension, and Sickness and Unemployment Benefit and all other benefits paid from the GIF, which will all increase by 4.2%.
Those receiving Long-term Care Benefits (LTC) will also see an increase, of 4.7%, as will those receiving Respite Care Benefit, both taking effect in January.
However, for LTC beneficiaries the rate will fall slightly in July next year, with the States saying it’s to offset the increase in the individual’s co-payment, ensuring the total combined payment to the care home remains consistent until next year’s annual review.
The cost to the average islander who is an employee is an estimated increase of 82 pence per week or £42.67 per year, using the officially published median earnings for employees in Guernsey, set at £42,672.
Speaking to members during her opening comments, Deputy Tina Bury, President of the Employment & Social Security Committee, said they haven’t brought anything new in the proposals, but instead have acted on resolutions already agreed within the States Chamber previously.
“In February of this year, the States agreed a number of measures to stabilise the provision of long term residential care and to try to incentivise growth in the market to meet increasing demand.”
Deputy Bury continued: “These changes included gradually increasing the co-payment to fully cover the cost of accommodation and living expenses, increasing the sum of the co-payment and benefits paid so that it fully covers the cost of delivering bed based care, and introducing a guideline uprating policy of RPIx plus 1%.
“The proposals in this policy letter reflect those agreed changes. In fact, all of the proposals in the policy letter are in line with resolutions of the states, so we’re not proposing anything out of the ordinary or going out on a limb.”
Deputy Bury added that there have been thoughts towards what can be done differently in the future, but that the fledgling committees, having been appointed earlier this year, haven’t had time to do “anything meaningful”.
“That’s not to say that some consideration hasn’t been given to doing things differently,” she said. “However, as with the budget experience that most of us have had, there has been very little time to do anything meaningfully different on this occasion, but we do have alternative options to consider going forwards, as is alluded to in the policy letter.”