New Policy Brief on social security

The Policy Centre has published a comprehensive description of Jersey’s social security system, the first such study since 2017.  A detailed Policy Brief draws on the limited amount of easily accessible information including the Government's annual Budgets and Annual Accounts, a response to a Freedom of Information request and the statistics on the government’s opendata archive.

Key points –

Contributions

• In 2024, £403 million was paid into the social security scheme, 40% by employees, 34% by employees, 6% by the self-employed and 19% from taxation.
• Jersey’s contribution rates are significantly below those of the UK where the basic rate for employees is 8% with an additional 2% for those on higher incomes

Pensions

• Benefits of £387 million were paid in 2024, of which pension payments accounted for £255 million.
• The full state pension is £14,899 a year, 24% higher than the UK figure of £11,973 and similar to Guernsey’s £14,576. Entitlement depends on the period for which contributions have been made, not the amount of contributions, so the system redistributes income from the higher paid to the lower paid.
• The Social Security (Reserve) Fund, which largely exists to meet pension liabilities, stood at £2,452 million at end-2024.

Health and long-term care

• The Health Insurance Fund provides financial assistance to Jersey residents who need access to general practitioner (GP) services, in particular by partially offsetting the doctor's consultation charge and meeting in most cases the full cost of drugs prescribed by the GP.
• In 2024, the Health Insurance Fund paid benefits of £52 million in 2024, mainly to help meet the cost of GP appointments and drugs for low-income people.
• 2 million prescriptions were funded at a cost of £19 million plus dispensing fees of £9 million
• In 2024, 4,477 people received the Long-Term Incapacity Allowance totalling £28.7 million
• The Long-Term Care Fund provides financial support to Jersey residents who need long-term care for the rest of their lives, either at home or in a care home. It is means tested, taking account of income and assets.  There is no similar scheme in the UK. It is funded separately by an additional 1.5% levy on income tax. Revenue in 2024 was £45 million but payments were £80 million, necessitating a significant contribution from tax revenue.

Income support

• Income support is funded out of general taxation not social security contributions. Payments totalled £78 million in 2024 of which £34 million was to meet housing costs.

Commenting on the social security system, the Centre’s Senior Adviser, Sir Mark Boleat, said –

“Jersey has a comprehensive social security system which provides a wide range of benefits at a lower cost than the UK system. But how the system works has been opaque.

The last comprehensive report on the system was in 2017.  Pulling together the data for the Policy Centre report has been a lengthy process with key data only being provided in response to a Freedom of Information request.

The report shows only a modest increase in the total cost of the benefits over the last years, in sharp contrast to the position in the UK.  Jersey’s system in particular has not led to the massive increase in disability benefit that has occurred in the UK. In England and Wales, 4 million 16-to 64-year-olds now claim either disability or incapacity benefits, up from 2.8 million in 2019. There has been no such increase in Jersey.

The absence of up-to-date reliable information means that misinformation can easily be spread and not easily countered. We will endeavour to keep our Brief up to date in the absence of the Government publishing the statistics on a regular basis and in an accessible format.”

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