Pensioners will be £20 a week worse off under reforms - or will they?

Tuesday 08 September 2015

Typical pensioners could lose out by £20 every week under proposals to reform Social Security according to one backbencher - but the department insist it's impossible to say for sure.

The department has been told to make savings of £10 million as part of the States four-year financial plan and they aim to do that by freezing the amount of Income Support it pays out over the next two years.

But when pressed on precisely what that would mean for the man and woman on the street at a Scrutiny panel hearing last week, its minister and officers weren’t sure.

Deputy Geoff Southern, a member of the Health and Social Security Panel, says that a single pensioner will be £18 a week worse off once the core components of Income Support are frozen for 2016 and 2017 and the fixed pension ‘disregard’ for a full States pension is replaced with a percentage. Add the scrapping of the Christmas Bonus and the TV licence into the mix and the Deputy believes that pensioners will lose up to £20 a week.

The St Helier Deputy was basing his figures on an inflation rise of 3.1 per cent, which is the same figure that the Social Security department used to come to its £10m savings’ total.

But when challenged by Deputy Southern at the Scrutiny hearing, Social Security Minister Susie Pinel said that she couldn’t agree with his figures because she couldn’t predict how much prices will rise by. She wouldn’t be swayed even when Deputy Southern said his figures were based on the 3.1 per cent that the department itself had used to make its own savings predictions.

In a statement after the hearing, Deputy Southern said: “The poorest and most vulnerable in society, including pensioners, are being made to pay for the £175m black hole caused by the Council of Ministers’ mishandling of the economy.

“While much attention has been paid to the scrapping of the Christmas Bonus and the closure of the TV licence scheme to new entrants, two further changes to Income Support will reduce the spending power of the worst off pensioners by much greater amounts”

“We in Reform Jersey will oppose this unfair targeting of the poorest in our community and will lodge amendments to the MTFP replacing these savings with additional tax on the wealthy.”

The States MTFP - including the benefit reforms - will be debated by the States next month.