Pensions and benefits could increase by 4.2% if the States back Employment & Social Security’s recommendations.
This would see the weekly pension payout increase to £292.09, while sickness and unemployment benefit would rise to £215.04 and parental allowances to £292.67.
Contributions would go up by between 0.1% and 0.2% for individuals, businesses and self-employed people, to bring in an additional £5.4m per year to the States’ coffers.
Contributions from individuals and businesses were increased in 2022 for the first time since 2017 to ensure the long-term stability of the funds which payout benefits.
Social insurance payments, such as the States pension, parental and unemployment benefits, are made from the Guernsey Insurance Fund.
It’s predicted there will be £219.1m of expenditure from the fund in 2026, with a predicted shortfall before investment returns of £33.2m.
ESS says this is down to the increase in rates but also a higher number of people claiming pensions – with a £184.5m estimated spend on pensions for 2026.
Care benefits could also rise by 4.7%, which are funded by the Long-term Care Insurance Fund, assisting islanders with the costs of bed-based care or private care homes.
The cost of the co-payment paid by service users will also go up as part of phased measure to ensure the true cost of care is paid, and to protect the private care sector.
“This is in line with the States approved policy to move towards the position where recipients of bed-based long-term care will fully fund their accommodation and living expenses by the end of the five-year phasing period in January 2030,” ESS said.
The States will debate the proposed increases in October.