PROPOSALS to oblige high-earners to pay contributions for social security and long-term care at the same rate as other Islanders have been rejected by States Members.
Deputy Sam Mézec said his proposed amendment to the Government Plan followed a pledge included in the Reform Jersey manifesto earlier this year to remove the cap of £250,000, above which there are no further increases in the level of social security and long-term care paid.
The amendment sought to bring in an estimated boost of £7 million to the Social Security Fund and £6.5m to the Long Term Care Fund.
He said: ‘The richer you are, the less [under the current arrangement] you pay – this is immoral and unhelpful and at odds with the broader principles of progressive taxation.
‘Fairness is playing by the same set of rules.’
Social Security Minister Elaine Millar described the amendment was ‘poorly-timed and would achieve little’, saying that it was motivated by political principles.
Deputy Millar said that, if adopted, the scrapping of the cap would limit the attraction for businesses to locate high-earning individuals to Jersey, potentially losing all the benefits of such moves in terms of income tax, social security contributions and GST paid by such people.
Deputy Max Andrews said that adding to the Social Security Fund would reflect the fact that reserves could become exhausted by 2067 as a result of an ageing population, and Deputy Montfort Tadier said the Island should ‘make hay while the sun shines’ by adding to the fund now, rather than in desperation at a later stage.
Treasury Minister Ian Gorst said Jersey’s social security arrangements were something for the Island to be proud of and would be the envy of many other jurisdictions.
Deputy Gorst was one of several Members to mention an actuarial review into the social security fund, due in the second quarter of 2023, and to say it would be wrong to make decisions ahead of the publication of the review.
He said: ‘Rather than raise money, this proposal would send shockwaves through the business community.’
Deputy Philip Ozouf said that due consultation needed to take place as opposed to ‘taking decisions on the hoof’.
Deputy Rob Ward said those who believed in fair taxation should vote to bring in the measures now, rather than leave measures to tackle income equality for a later date.
Following the debate, Members voted by 28 votes to 16, with one abstention, against Deputy Mézec’s amendment.
Deputies Kristina Moore and Steve Luce withdrew from the debate at the outset having declared that the matter would have a financial effect on their household income.
