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Social Security Department under-spend 2013 transferred to Long Term Care Fund

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.

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A decision made 20 January 2014:

Decision Reference:  MD-TR-2014-0001

Decision Summary Title:

Social Security Department’s under-spend allocated in 2013 to create payments into the Long Term Care Fund

Date of Decision Summary:

6th January 2014

Decision Summary Author:

Head of Decision Support

Decision Summary:

Public or Exempt?

Public

Type of Report:

Oral or Written?

Written

Person Giving

Oral Report:

N/A

Written Report

Title:

Social Security Department’s under-spend allocated in 2013 to create payments into the Long Term Care Fund

Date of Written Report:

6th January 2013

Written Report Author:

Head of Decision Support

Written Report :

Public or Exempt?

Public

Subject: Social Security Department’s (SSD) under-spend allocation to create payments into the Long Term Care (LTC) Fund in 2013 as per the Addendum to P.140/2013 Long-Term Care (States Contribution) (Jersey) Regulations 201-

Decision(s): The Minister approved a grant payment of £11,700,000 from SSD revenue under-spends to the LTC Fund.

Reason(s) for Decision:

The States Assembly approved the Long-Term Care (States Contribution) (Jersey) Regulations 201- (P.140/2013) on the 11th December 2013, in which is detailed the States’ Contribution from SSD and Health and Social Services in 2013 to 2015.

Resource Implications: The decision will result in an expense of £11,700,000 in the SSD revenue head of expenditure with the LTC Fund increasing by an identical amount in 2013. This decision does not change the total amount of expenditure approved by the States for the period of the current Medium Term Financial Plan 2013 to 2015.

Action required: Head of Decision Support to notify the Financial Performance Reporting Manager and the SSD Finance manager that this decision has been approved.

Signature:

 

 

 

Position: Senator P F C Ozouf, Minister for Treasury & Resources

Date Signed:

 

Date of Decision:

Hide report
Social Security Department under-spend 2013 transferred to Long Term Care Fund

 

Treasury and Resources

Ministerial Decision Report

 

 

Social Security Department’s under-spend allocated in 2013 to create payments into the Long Term Care Fund

 

  1. Purpose of Report

 

To enable the Minister for Treasury and Resources (T&R) to approve Social Security Department’s (SSD) under-spend allocation to create payments into the Long Term Care (LTC) Fund in 2013 as per the Addendum to P.140/2013 Long-Term Care (States Contribution) (Jersey) Regulations 201-, which was approved by the States Assembly on the 11th December 2013.

 

  1. Background

 

The Draft Long-Term Care (States Contribution) (Jersey) Regulations 201- (P.140/2013) and Addendum to P.140/2013 was debated and approved by the States Assembly on the 11th December 2013. The Regulations detailed the annual contribution from the Consolidated Fund into the LTC Fund from 2016 onwards. The Addendum also provided details of the additional amounts that will be paid into the LTC Fund in 2013 to 2015 to compensate for the delay in the introduction of long-term care contributions.

 

Instead of collecting contributions from 1st January 2014 at 1% it will now start making collections in January 2015 at 0.5% with 1% contributions starting from January 2016.

 

Extract from P.140/2013 Long-Term Care (States Contribution) (Jersey) Regulations 201- Addendum:

Until the LTC contribution rate is set at 1% in 2016, additional payments into the LTC Fund will be needed to ensure that the LTC scheme can operate.

Based on 2011 tax data, a 1% LTC contribution is estimated to yield £15.3 million in 2011 prices.

As such, taking into account changes proposed in the budget (P.122/2013) and RPI/Average Earnings, it is estimated that 1% in 2014 would yield £16.3 million and £16.9 million in 2015. With LTC contributions starting at 0.5% in 2015, this equates to a loss of income into the LTC Fund over the first 2 years of £24.7 million.

Due to the level of provision for the costs of the recession within tax-funded benefit budgets and actual costs being lower than originally anticipated, the Medium Term Financial Plan includes funding for the Social Security Department in 2013, 2014 and 2015, which is unlikely to be spent fully. These surplus budgetary amounts will be released to create payments into the LTC Fund to maintain the viability of the LTC scheme until 2016.

These amounts are only provided as an indication of the likely amounts available.

They cannot be confirmed until the end of each year, when actual expenditure has been calculated.

As agreed with the Minister for Social Security and the Minister for Treasury and Resources:

         The estimated SSD budgetary value to be allocated as a payment to the LTCF in 2013: £11.7 million

         The estimated SSD budgetary value to be allocated as a payment to the LTCF in 2014: £9.0 million

         The estimated SSD budgetary value to be allocated as a payment to the LTCF in 2015: £6.4 million.

 

3. Recommendation

 

The Minister is recommended to approve a grant payment of £11,700,000 from SSD revenue under-spends to the LTC Fund.

 

4. Reason for Decision

 

The States Assembly approved the Long-Term Care (States Contribution) (Jersey) Regulations 201- (P.140/2013) on the 11th December 2013, in which is detailed the States’ Contribution from SSD and Health and Social Services in 2013 to 2015.

 

5. Resource Implications

 

The decision will result in an expense of £11,700,000 in the SSD revenue head of expenditure with the LTC Fund increasing by an identical amount in 2013. This decision does not change the total amount of expenditure approved by the States for the period of the current Medium Term Financial Plan 2013 to 2015.

 

 

Report author : Head of Decision Support

Document date : 6thJanuary 2014

Quality Assurance / Review : Business Manager

File name and path : L:\Treasury\Sections\Corporate Finance\Ministerial Decisions\DSs, WRs and SDs\2013-0121 - LTC fund\WR - SSD allocation in 2013 to the LTC Fund.docx

 

 

 

 

 

 

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