Deputy Carolyn Labey has criticised proposals by the Treasury Minister to scrap higher thresholds for over-65s that have been in place for many years.
She has lodged an amendment to the Budget calling for the move to be scrapped and for the enhanced thresholds for Jersey’s oldest residents to be protected.
In the 2016 Budget, which is due to be debated next month, it is proposed that the level at which pensioners begin paying tax will be frozen while it will be increased by 0.9 per cent for everyone else.
Over time the move, which would bring in£200,000 a year for the States, is intended to bring the thresholds together so that eventually all Islanders will start paying tax at the same level.
Last week in the States, Treasury Minister Alan Maclean defended the proposal and said it was fair that Islanders of all ages were treated the same.
He said that the different thresholds had been put in place at a time when the Island was financially better off.
Deputy Labey, in the report accompanying her amendment, says: ‘Pensioners who have worked, been prudent and have saved for their retirement should be given some certainty by this government as to their taxation and how those liabilities will be calculated, because in most cases once they reach age 65 their own income is certain.’
Currently the level at which pensioners begin paying tax is higher than for younger Islanders – £15,900 for a single pensioner compared to £14,200 for a single person aged under 65.
Married couples currently begin paying tax at £26,100 for pensioners and £22,800 for under-65s.
Deputy Labey says that the current thresholds for pensioners should actually be increased to help the one in three over-65s living on relative low income and eliminate the 28 per cent who are currently considered at risk of poverty.
That is because, she says, the survival incomes required to live on in Jersey are currently £29,400 for two adults living together and £19,698 for a single adult.
Deputy Labey said: ‘Proposing to freeze age 65-plus thresholds that are already currently below the survival incomes, the Minister for Treasury and Resources is actively advocating increasing the poverty of the 7,500 to 8,000 pensioners who pay tax at the Marginal Relief Rate.’
