Food Costs Bonus (Jersey) Regulations 201-

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A decision made 14 April 2014:

Decision Reference: MD-S-2014-0033
Decision Summary Title :	DS - Food Costs Bonus (Jersey) Regulations 2014		Date of Decision Summary:	11 April 2014
Decision Summary Author:	Policy Principal		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	WR- Food Costs Bonus (Jersey) Regulations 2014		Date of Written Report:	11 April 2014
Written Report Author:	Policy Principal		Written Report : Public or Exempt?	Public
Subject: Food Costs Bonus (Jersey) Regulations 201-
Decision(s): The Minister decided to lodge ‘au Greffe’ the Food Costs Bonus (Jersey) Regulations 201-
Reason(s) for Decision: These regulations replace the existing Food Costs Bonus Regulations which will expire on 30June 2014. The value of the Bonus is reset to take account of the increase in food costs during 2013 and the value of the Bonus for 2014 will be £226.95
Resource Implications: The cost of the Bonus in 2014 is estimated at £340,000 which is allowed for in the departmental cash limit.
Action required: Policy Principal to request the Greffier of the States to lodge ‘au Greffe’ the draft legislation and to request a States debate on 3 June 2014.
Signature:		Position: Minister
Date Signed:		Date of Decision (If different from Date Signed):

Food Costs Bonus (Jersey) Regulations 201-

Renewal of Triennial Regulations for Food Cost Bonus

The existing Food Cost Bonus Regulations were approved on 24th June 2011 and are due to expire on 30th June 2014. It is proposed that the Regulations are renewed for one further three year term to enable the Bonus to be paid in respect of 2014, 2015 and 2016 and that the opportunity is taken to update some aspects of the Regulations.

The Food Cost Bonus Regulations replaced the original GST Bonus Regulations and were first established in 2008, being renewed in 2011. The Bonus originally offered compensation for the cost of GST on food among certain household groups. The value of the bonus was increased to include an element in respect of the cost of food itself and then further increased to acknowledge the increase of GST from 3% to 5%. In 2013 the value of the bonus was £220.98.

The bonus is paid to households as defined by the Income Support legislation. Qualifying households:

do not receive income support
are not liable to pay income tax
contain at least one member who has been ordinarily resident in Jersey for at least 5 years

The Food Cost Bonus is claimed annually by submitting an application form. To date some 1,448 bonuses have been paid in respect of 2013 at a cost of just under £320,000.

Renewal of Regulations

Most aspects of the regulations remain unchanged. The value of the bonus paid in 2013 has been uprated by the annual increase in the value of the food group of the RPI measured at December 2013 and the new value for 2014 is given as £226.95. Previously the value of the bonus was uprated by Ministerial Order; the new Regulations provide that the bonus will be uprated annually in respect of any subsequent increases in the food group of the RPI.

Qualification for the Bonus is substantially unchanged, but the rules in respect of the tax year used for assessing eligibility have been simplified. Previously claims submitted on or before 1st October referred to the tax liability falling two years before the relevant year and claims submitted after October 1st referred to the tax liability in the previous year. In the new regulation eligibility will be conferred by the previous year only. In some cases this could result in claims being submitted later in the year when the Tax liability is known. However this change will simplify the application process for claimants.

The 2011 order made intricate references to households which resided entirely in residential care, their entitlement to transitional payments under Income Support and ‘top up sums’. As the wording of the Regulation was open to interpretation, it was agreed to pay the Bonus to households which resided wholly in residential care and were fully self-funding. The new regulation clarifies this entitlement and does so recognising the imminent implementation of the Long Term Care Law. The Food Cost Bonus will be paid to households which reside entirely in Residential Care, and meet all other eligibility conditions as long as they do not also receive a means tested benefit under the Long Term Care (Jersey) Law 2012. This exclusion mirrors the exclusion applied to Income Support.

For clarity, the Food Cost Bonus will be available to

a) households which receive any type of benefit under the Long Term Care Law and reside in their own homes, and;

b) households living in care homes which only receive a non-means-tested benefit under the Long Term Care Law and do not receive any means-tested benefit under that Law. These households will be making a full contribution towards their living costs in the care home.

Financial and manpower implications

Based on an uptake of 1,500 people and a value of £226.95, benefit costs in the region of £340,000 are anticipated in 2014. This figure is provided for in the Department’s cash limit.

There are concerns that some eligible households are not claiming the Bonus. The department therefore has renewed marketing materials and is seeking to encourage applications. An increase in uptake will increase the funding required from the Department.