Deputy Geoff Southern heavily criticised plans on Thursday that were recently proposed by the Social Security Department, saying that their proposals would ‘hurt the poorest pensioners’.
The level of income applicants require is calculated through adding up components such as rent and household costs and taking into account whether they have children.
Social Security have now proposed to alter the amount of income disregarded for income support calculations for over-65s from a fixed amount to a percentage amount from the start of next year.
Currently pensioners have a fixed amount of £55.23 of their pension not taken into account when they receive an income support top-up. However, it was proposed in July’s Medium Term Financial Plan that this amount be changed to 23 per cent of their total pension income.
But while many income support applicants will benefit from larger disregards – which the Social Security Department hopes will encourage Islanders to save more for pensions – Deputy Southern has expressed a concern that the change means that low-earning OAPs depending on States pensions will receive less income support.
This would mean that they receive £9.23 less per week, which adds up to around £480 less per year.
Deputy Southern said: ‘This will hurt the poorest pensioners. Those who have employer-provided pension schemes and more income will benefit, but those who depend on the States pension alone will have less pension income disregarded.’
He added: ‘Low-paid workers find it more difficult to get their employers to introduce pension schemes – they won’t get any benefit from this.’
Several budget cuts have been announced in the last few months, including pensioners’ Christmas bonuses, over-75s television licences and income support cuts for single parents, jobless under-25s and long-term incapacity sufferers
Have any of these affected you or will they affect you in the future?
In response, the Social Security Minster Susie Pinel said: ‘There are cuts across the board – this is affecting everyone.’
Deputy Southern went on to criticise cuts to additional income support provided for lone parents and called for an inquiry into whether the changes would result in increased child poverty in the Island.
Social Security director Sue Duhamel pointed out that the proposed increase in the amount of maintenance income being disregarded for income support would help compensate for this by incentivising lone parents to pursue maintenance payments.
Deputy Pinel said: ‘The move is intended to encourage lone parents to pursue maintenance payment from their partners – only half of them are doing that at the moment. This is designed to encourage financial independence.’
In response, Deputy Southern asked if the Social Security Department would be taking any measures to assist single parents in pursuing maintenance, which can result in high legal costs.
The minister said that the administration and employment costs of doing so would be too high.
Deputy Southern and the panel chairman, Deputy Richard Renouf, also criticised plans to scrap the pensioners’ annual Christmas bonus and free TV licences for over-75s, suggesting that the benefits could have been means-tested rather than cut entirely.
They suggested pensioners on income support could have retained such benefits, with a low amount of additional administration required to do so.
Ms Duhamel pointed out that those benefits had been targeted because it would be easy to calculate how much expenditure could be saved from cutting them, and the Social Security Department’s priority was to spend money on ways to help the most vulnerable pensioners, such as through the extension of the 65-plus health scheme.
The Social Security Department’s proposals will be debated in the States Assembly next month.
