Pay boost for all in social-security contributions cut

ALL working Islanders will receive a pay packet boost from next month after the States voted to cut social-security contributions by 2% as part of a Covid-19 economic recovery package.

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In a move costing £26 million, which was approved by 38 votes to six, employees will pay 4% instead of 6% on their earnings capped at the monthly standard earnings limit of £4,558 until June 2021.

And self-employed Islanders will also benefit, paying 10.5% instead of 12.5% up to the limit. Those on average earnings in Jersey – about £780 per week – should benefit by around £600 over the nine months.

The measure is part of an overall £150 million package that was announced by ministers in July to help revive the economy as it emerges from the Covid-19 crisis and included the £100 ‘spend local’ voucher card scheme, which is launching this week.

A number of Members raised concerns that the cut to contributions, brought to the House by Social Security Minister Judy Martin, was not well targeted and that there was no guarantee Islanders would spend the extra money in the local economy.

Senator Kristina Moore opposed the move, pointing out that Islanders on higher incomes towards the upper level of the standard earnings limit cap would benefit most from it.

Deputy Kirsten Morel voted in favour of the proposal but said that he felt it was a ‘hit-and-hope’ measure, with no guarantee the extra money would not leak away from the local economy.

Members of the Reform Jersey party spoke in favour of the proposition, with Senator Sam Mézec saying that it would benefit those on lower incomes.

And Deputy Geoff Southern said he was confident the move ‘would put money in workers’ pockets’ but added that he was concerned about depletion of the Social Security Fund.

Deputy Jeremy Maçon said that the proposals were part of a range of measures that would benefit different groups in the Island.

Summing up the proposition, Assistant Social Security Minister Scott Wickenden said he believed Islanders would use the extra money to support each other.

‘If we don’t do something for supporting the economy now, the loss to the Social Security Fund could be even greater,’ he said.

‘We have seen over the Covid period how Islanders have gotten together and helped each other in so many ways.’

The six Members who voted against the proposal were: Deputies Steve Ahier and Jess Perchard, Constables John Le Bailly, Karen Shenton-Stone and Richard Vibert and Senator Kristina Moore.

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