Insolvency Benefit: Data Sharing Agreement with Income Tax

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A decision made 29 November 2012:

Decision Reference: MD-S-2012-0100
Decision Summary Title :	Insolvency Benefit – DSA with Jersey Taxes Office (GOV276)		Date of Decision Summary:	28 November 2012
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 :	Insolvency Benefit – DSA with Jersey Taxes Office (GOV276)		Date of Written Report:	28 November 2012
Written Report Author:	Policy Principal		Written Report : Public or Exempt?	Public
Subject: Insolvency Benefit – Data Sharing Agreement (DSA) between the Social Security Department (SSD) and the Jersey Taxes Office.
Decision(s): The Chief Officer for SSD has signed DSA GOV276. The Minister for Social Security has decided to request that the Minister for Treasury and Resources authorises the disclosure of information as specified in this agreement. As per Article 13A of the Income Tax (Jersey) Law 1961, the Comptroller of Taxes is authorised to disclose information to SSD for any purpose approved by the Minister for Treasury and Resources as requested by the Minister of Social Security.
Reason(s) for Decision: The Social Security (Amendment No.20) (Jersey) Law 2012 will amend the Social Security (Jersey) Law 1974, as of 1 December 2012, to introduce a new insolvency benefit. The Social Security Law will provide that if income tax is payable under the Income Tax (Jersey) Law 1961 and would have been deductible or payable in respect of any component of insolvency benefit if that component had been paid by the employer, the value of the income tax must be deducted from the component of benefit. The Income Tax (Amendment No. 40) (Jersey) Law 2012 (Article 41HA) introduced the requirement that, where the Minister for Social Security is required under the Social Security (Jersey) Law 1974 to deduct income tax from a component of insolvency benefit, that amount shall be at the same effective rate that the person’s employer would have been required to deduct. It further requires that the amount of any income tax deducted as a result is to be remitted to the Comptroller. Article 13A of the Income Tax (Jersey) Law 1961 provides that the Comptroller may disclose information to the Social Security Department for any purpose approved by the Minister for Treasury and Resources.
Resource Implications: There are no financial or resource implications associated with this data sharing agreement
Action required: Policy Principal to forward copies of this Ministerial Decision and the DSA to the Minister for Treasury and Resources for his approval.
Signature:		Position:
Date Signed:		Date of Decision (If different from Date Signed):

Data Sharing Agreement with Income Tax: Insolvency Benefit

Data Sharing Agreement GOV276 between the Jersey Taxes Office

& the Social Security Department in respect of Insolvency Benefit paid under the Social Security (Jersey) Law 1974

Purpose

The aim of the Ministerial Decision and Data Sharing Agreement (DSA) GOV276 is to allow the Social Security Department (SSD) to deduct the correct effective rate of income tax from any relevant payments of insolvency benefit and to enable the Jersey Taxes Office to validate and correctly allocate such deductions to the correct person.

Background

The Social Security (Amendment No.20) (Jersey) Law 2012 will amend the Social Security (Jersey) Law 1974, as of 1 December 2012, to introduce a new insolvency benefit. The benefit will provide financial assistance to employees whose employment has ended, on or after 1 December, due to the formal insolvency of their employer.

Previously, a ‘temporary insolvency scheme’ paid statutory notice pay to employees whose employment ended from January 2009 to November 2012 due to the insolvency of their employer. That temporary scheme will close to new claims as of 30 November 2012.

The Income Tax (Amendment No. 40) (Jersey) Law 2012 introduced via the insertion into the Law of Article 41HA the requirement that where the Minister for Social Security is required under the Social Security (Jersey) Law 1974 to deduct income tax from a component of benefit, that amount shall be at the same effective rate that the person’s employer would have been required to deduct.

It further requires that the amount of any income tax deducted as a result is to be remitted to the Comptroller.

Article 13A of the Income Tax (Jersey) Law 1961 provides that the Comptroller may disclose information to the Social Security Department for any purpose approved by the Minister for Treasury and Resources.

Recommendation

As per Article 13A of the Income Tax (Jersey) Law 1961, the Comptroller of Taxes has authority to disclose information to SSD for any purpose approved by the Minister for Treasury and Resources as requested by the Minister of Social Security.

Further to the Chief Officer for SSD signing DSA GOV276 the Social Security Minister decided to request that the Minister for Treasury and Resources approves authorisation to disclose information as specified in this agreement.