Social Security (Bonus) (Jersey) Law
This proposition presents legislation to create a new framework law to enable, via regulations, the payment of bonuses. The creation of such legislation will offer several advantages.
In the past the States have used triennial regulations to bring bonuses into payment when constraints on resources or timescales would not permit the drafting of primary legislation. On occasions these triennial regulations have been subject to repeated renewals. The Social Security (Bonus) (Jersey) Law will offer a time-effective means for bringing future bonuses into payment without recourse to primary legislation and the Privy Council.
The first of these is the Cold Weather Bonus which is paid to pensioners to defray the cost of winter heating bills. This bonus is currently paid via triennial regulations and is due to expire in June 2014. The Social Security (Bonus) (Jersey) Law can be used to establish the Cold Weather Bonus in primary legislation.
In future, the Bonus Law may also be used to consolidate other benefits and bonuses, such as the Christmas Bonus and TV Licence Benefit. This will provide opportunities to standardise administration with the potential to reduce the cost of administering bonus payments and improving the service offered in the application and payment processes.
Content of the Social Security (Jersey) (Bonus) Law 201-
The purpose of the Social Security Bonus Law is to provide a framework within which detailed regulations and orders can be established to provide for a range of bonuses over time.
Regulations under the Bonus Law
The Social Security (Bonus) (Jersey) Law provides a new power for the States to make regulations to entitle groups of people to a payment or a bonus. The power to make regulations under the Bonus Law will be used to define the eligibility criteria for receiving the bonus and the nature of the bonus which could be a money payment, vouchers, pre-paid card or so forth.
In addition, regulations will also provide for the appointment of agents, determination of claims, reviews, appeals, recovery of sums wrongly paid, and offences and penalties.
Order making powers
The Bonus Law provides for order making powers to set the initial value of the bonus and prescribe how the value of the bonus and asset or income bars may be varied, to specify procedural matters and to set administration fees associated with the regulations.
Offences
The Bonus Law sets out offences which are standard to other benefits currently in payment and creates an offence in cases where a false claim is made. Such offences are liable to a fine and imprisonment. These offences have been subject to review and approval by the Attorney General and the Social Security (Bonus) (Jersey) Law has been validated against Human Rights requirements.
The Cold Weather Bonus Schedule
The Cold Weather Bonus (Jersey) Regulations 2012 allow payment to lower income pensioners to help with heating costs during winter months. These are triennial regulations which are due to expire on 30th June 2014 and further provision must be made if the bonus is to be paid in respect of the coming winter. The bonus has therefore been included as a schedule in the Social Security (Bonus) (Jersey) Law.
Purpose of the Cold Weather Bonus
A cold weather bonus was first paid in May 2012, having been introduced by P.186/2011. It is essentially a ‘domestic’ bonus, designed to compensate lower income pensioner households for fuel costs in cold winter months. It is available to both owner occupiers and tenants but does not extend to individuals living in hostels or care homes.
The value of the cold weather bonus varies according to the temperatures recorded during a cold weather month, these being October through to April inclusive. Payments are made in January in respect of October, November and December and in May in respect of January, February, March and April. The amount paid is calculated according to the average daily temperature in each of the cold weather months. If the average recorded temperature for a day falls below 15.5 degrees, the amount by which it falls below 15.5 is noted and totalled. If this total sums to 90 or more during that month then a cold weather bonus is paid. This formula is identical to that used for cold weather payments under Income Support Law and, like income support, the value of the bonus is automatically updated each year in line with the annual increase in fuel prices, as reported in the June RPI.
A cold weather bonus was first paid in respect of January to April 2012, where it totalled £170.61 and has ranged between £70 and £230 since its introduction.
Value of cold weather bonus since introduction
Jan-April 2012, £170.61
Oct-Dec 2012, £72.87
Jan-April 2013, £231.75
Oct-Dec 2013, £72.25
Jan-April 2014, £127.89
Eligibility for a cold weather bonus
The current Cold Weather Bonus Regulations define eligibility with reference to the Food Cost Bonus Regulations. These references have been removed so it will function without reference to the triennial Food Cost Bonus Regulations which will fall away in 2016.
Despite this, eligibility for the cold weather bonus remains essentially unchanged from the previous regulations, requiring that households that apply:
- do not receive a cold weather payment under the Income Support Law,
- include a member who has at least 5 years ordinary residence, continuously before the application
- do not include a tax payer
- include a member over pensionable age who is in receipt of a Jersey old age pension
- include the tenant or owner of the accommodation, who is responsible for the cost of heating.
Following States approval for the amendment to P.115/2013, as proposed by the Minister for Social Security last year, the Schedule also extends eligibility to provide that pensioners who do not receive a Jersey old age pension may still apply on the condition that they have 10 years continuous residency.
The existing rules regarding the year of assessment for income tax have also been amended to refer to the previous tax year only. This amendment provides clarity to applicants and operationally simplifies the application process.
The current triennial regulations provide that a bonus is not paid if the dwelling is shared with another household which is receiving a cold weather payment under Income Support legislation and that if more than one household occupies the same dwelling and more than one qualify for the cold weather bonus, that the bonus is split between households. These provisions are maintained.
Financial and manpower considerations
There are no resource implications resulting from the creation of this framework Law. The cost of bonuses created under the law will draw on Social Security Tax Funded Budgets and thus subject to departmental financial controls within the Medium Term Financial Plan. The schedule to provide for a cold weather bonus provides for the replacement of the existing bonus under similar terms and conditions and the cost of the bonus is included within existing departmental budget.
Over 1,000 pensioners receive the cold weather bonus and the Department will continue to promote the bonus and encourage more eligible pensioners to apply. In August 2012 and 2013 flyers were distributed with pension uprate letters informing pensioners of the other benefits and schemes they may be eligible for and encouraging applications for the cold weather bonus. The flyers were updated in 2013 and the use of this publicity material may be responsible for an increase in uptake.
Cold weather month | Number of Claimants (Households) |
Jan-April | 2012 | 952 |
Oct-Dec | 2012 | 1,063 |
Jan-April | 2013 | 1,070 |
Oct-Dec | 2013 | 1,131 |
The cost of the benefit varies considerably according to temperature and across the two full years of operation has averaged £283,000. The forecast for 2014 is currently held at £253,000 considering the comparatively mild start to 2014.
Replacing the Cold Weather Bonus Triennial Regulations with the new Bonus Law is not associated with any increased administration and there may be some minor savings in resources which would otherwise be used in the maintenance of triennial regulations. It is anticipated that efficiencies can be realised if bonuses are arranged and standardised under the new Bonus Law.
Human Rights
The notes on the human rights aspects of the draft Law in the Appendix have been prepared by the Law Officers’ Department and are included for the information of States Members. They are not, and should not be taken as, legal advice.
APPENDIX TO REPORT
HUMAN RIGHTS NOTES ON THE DRAFT SOCIAL SECURITY (BONUS) (JERSEY) LAW 201-
These notes have been prepared in respect of the Draft Social Security (Bonus) (Jersey) Law 201- by the Law Officers’ Department.
In the Law Officers’ opinion, the draft Law is compatible with the European Convention on Human Rights (“ECHR”) as implemented under the Human Rights (Jersey) Law 2000. The States have under the settled case-law of the European Convention a very broad margin of appreciation in respect to determining the scope of benefit entitlements. This means that only enactments concerning such entitlements will only be incompatible with the Convention if decisions are made which are clearly unjustifiable.
The draft Law creates an entitlement to cold weather payments. Those entitlements make distinctions based on age and residents, but such distinctions are non-discriminatory. It is manifestly justifiable to link entitlement to this sort of benefit to age, and likewise to base entitlement in terms of factors such as entitlement to a Jersey old age pension and residency. The extent of an individual’s links to the island and contribution to the economy over their working lifetime are obviously justifiable factors to include when defining benefit entitlement. It is noted that the entitlement criteria represent a liberalisation of the pre-existing regime in that there is an alternative criterion for entitlement which does not require entitlement to a Jersey old age pension, but instead requires ten years residency prior to applying for the benefit. The reasons for this liberalisation are set out in P.115/2013 (Amd.), and the Law Officers believe that any Court would accept that the balance struck is well within the broad margin of appreciation given to the States.
The draft Law also creates a distinction on the basis that the household involved must be entitlement to occupy the premises concerned. This is a manifestly justifiable approach, as otherwise such payments might facilitate illegal occupation of premises.
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