Social Security (Contributions) (Amendment No. 9) (Jersey) Order 2011

Information about the publication of Ministerial Decisions

A formal published “Ministerial Decision” is required as a record of the decision of a Minister (or an Assistant Minister where they have delegated authority) as they exercise their responsibilities and powers.

Ministers are elected by the States Assembly and have legal responsibilities and powers as “corporation sole” under the States of Jersey Law 2005 by virtue of their office and in their areas of responsibility, including entering into agreements, and under any legislation conferring on them powers.

An accurate record of “Ministerial Decisions” is vital to effective governance, including:

demonstrating that good governance, and clear lines of accountability and authority, are in place around decisions-making – including the reasons and basis on which a decision is made, and the action required to implement a decision
providing a record of decisions and actions that will be available for examination by States Members, and Panels and Committees of the States Assembly; the public, organisations, and the media; and as a historical record and point of reference for the conduct of public affairs

Ministers are individually accountable to the States Assembly, including for the actions of the departments and agencies which discharge their responsibilities.

The Freedom of Information Law (Jersey) Law 2011 is used as a guide when determining what information is be published. While there is a presumption toward publication to support of transparency and accountability, detailed information may not be published if, for example, it would constitute a breach of data protection, or disclosure would prejudice commercial interest.

A decision made 16 November 2011:

Decision Reference: MD-S-2011-0094
Decision Summary Title :	DS – Make Order to amend Contributions Order		Date of Decision Summary:	14 November 2011
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 - Make Order to amend Contributions Order		Date of Written Report:	14 November 2011
Written Report Author:	Policy Principal		Written Report : Public or Exempt?	Public
Subject: Social Security (Contributions) (Amendment No. 9) (Jersey) Order 2011.
Decision(s): The Minister made the Social Security (Contributions) (Amendment No. 9) (Jersey) Order 2011.
Reason(s) for Decision: Amendments to various Orders made under the Social Security (Jersey) Law 1974 are required to support and reflect the changes to primary legislation that will introduce contributions above the current earnings limit from January 2012. As part of the agreed Fiscal Strategy, a new contribution rate of 2% will be levied on employers and Class 2 contributors in respect of earnings above the current earnings ceiling and up to £150,000 per annum. The Minister for Social Security is responsible for bringing forward the necessary amendments to the legislation and this amendment to the Contributions Order is a necessary part of that process.
Resource Implications: There are no specific financial or manpower implications in respect of this Order. The overall impact of the increased contributions will be a reduction in the States Grant of approximately £7 million in 2012. The Social Security Fund will meet the cost of the required increase in staffing of up to 5FTE for the administration of class 2 contributors and other administration costs.
Action required: Policy Principal to notify the Greffier of the States and the Law Draftsman that the Order has been made so that it may be notified to the States, and forward the signed and sealed Order immediately to the States Greffe for publication and archiving.
Signature:		Position: Minister
Date Signed:		Date of Decision (If different from Date Signed):

Social Security (Contributions) (Amendment No. 9) (Jersey) Order 2011

To accord with the aims of the Fiscal Strategy Review, the Minister for Social Security is responsible for bringing forward amendments to Social Security legislation to provide for contributions above the current earnings limit from January 2012.

On 20 July 2011, the States adopted draft Social Security (Amendment of Law No. 1) (Jersey) Regulations 2011 that would make the required changes to the primary legislation. Further detail of the proposals is included in the Proposition (P.110/2011). Changes are also required to subordinate legislation.

The Social Security (Contributions) (Amendment No. 9) (Jersey) Order, 2011, amends the Social Security (Contributions) Order, 1975, from 1 January 2012.

The main purposes of the amendment are to -

Replace and expand on provisions relating to Class 1 and Class 2 contribution liability, that were removed from the Social Security (Collection of Contributions) (Jersey) Order by the Social Security (Collection of Contributions) (Amendment No. 2) (Jersey) Order, 2011.

Introduce a concession for people who are setting up a new business, or taking over a business, so that Class 2 contributions may be paid at a lower rate for up to 3 years. Class 2 contribution liability is based on earnings and income received 2 years previously which can be a barrier to individuals moving from Class 1 employment into Class 2 self employment. The concession will be available to people who were previously Class 1 employed, unemployed and students. Contribution liability will be reassessed when tax assessments for the opening years of the business are available.

Further to schedules to the Social Security (Jersey) Law 1974 that define what constitutes earnings for the purposes of Class 1 and Class 2 contributions, modify these definitions and further define what constitutes income from self employment and total income for a Class 2 insured person.

Resource Implications

There are no specific financial or manpower implications in respect of this Order. The overall impact of the increased contributions will be a reduction in the States Grant of approximately £7 million in 2012. The Social Security Fund will meet the cost of the required increase in staffing of up to 5FTE for the administration of class 2 contributors and other administration costs.