Social Security Report and Accounts for 2005 are published

11 October 2006

The Social Security Minister has today announced that the 2005 Report and Accounts are now available to the public.

The Report and Accounts comprise the results of the Social Security Fund, the Social Security (Reserve) Fund and the Health Insurance Fund.

There are several interesting points to note:

· Income, excluding investment returns, rose to £193 million, an increase of 3.9%

(2004: £185 million).

· Expenditure on benefits was £158 million, a rise of 2.4% (2004: £154 million).

· The net asset value of the Social Security (Reserve) Fund rose to just under £500 million, this is an increase of £92 million, reflecting strong investment performance during the year.

· Contributions collected rose to £115.5 million (2004: £110.3 million) for the Social

Security Fund, and £22.0 million, (2004: £21.0 million) for the Health Insurance Fund. This rise mainly reflects the annual earnings-linked up-rating in the contribution ceiling (3.3%) but it also reflects an increase in the number of people working. In 2005, there were approximately 50,000 people – working in the Island and paying contributions.

· Supplementation, which is paid by the States out of taxation revenues, is used to top-up the contributions of the lower to medium range of wage earners to protect their entitlement to benefits. Supplementation levels remained steady at £51 million (2004: £51 million).

· Pension costs rose by 5.5% to £103.2 million (2004: £97.8 million). This is due to a

1.6% increase in pensioner numbers and the annual earnings-linked up-rating of pensions.

Senator Paul Routier, Minister for Social Security said "The foresight of the then Employment and Social Security Committee, with the agreement of the States, in increasing contributions between 1998 and 2002, combined with very robust investment performance for the year, leaves the Social Security Fund with a satisfying buffer towards the demographic pressures facing the Island. However we can not afford to be complacent as the healthy position of the Fund will be eroded by those pressures over the longer term, requiring decisive action. Over the coming years the Department will lead this debate, consulting widely to make proposals to find, and otherwise address, the considerable issues arising from an ageing population.