Food Costs (Offset of Average GST) Bonus (Amendment) (Jersey) Regulations 200-.

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A decision made (20/10/2008) regarding: Food Costs (Offset of Average GST) Bonus (Amendment) (Jersey) Regulations 200-.

Decision Reference: MD-S-2008-0066
Decision Summary Title :	DS Food Costs (Offset of Average GST) Bonus (Amendment) (Jersey) Regulations 200-		Date of Decision Summary:	20 October 2008
Decision Summary Author:	Sue Duhamel – Policy and Strategy Director		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	Food Costs (Offset of Average GST) Bonus (Amendment) (Jersey) Regulations 200-		Date of Written Report:	17 October 2008
Written Report Author:	Sue Duhamel – Policy and Strategy Director		Written Report : Public or Exempt?	Public
Subject: Food Costs (Offset of Average GST) Bonus (Amendment) (Jersey) Regulations 200-
Decision(s): 1. The Minister approved the Regulations and accompanying report 2. The Minister requested that the Regulations be lodged for debate on 2 December 2008.
Reason(s) for Decision: The amendment increases the level of the Bonus and changes the period during which it can be claimed, to bring into effect part of a package of measures contained in a proposition of the Treasury and Resources Minister to be debated on 2 December 2008.
Resource Implications: There are no manpower implications. The additional cost is provided for in the budget allocation of £400,000 provided for in the proposition of the Treasury and Resources Minster to be debated on 2 December 2008.
Action required: To lodge the Regulations through the Greffe for debate on 2 December 2008.
Signature:		Position:
Date Signed:		Date of Decision (If different from Date Signed):

Food Costs (Offset of Average GST) Bonus (Amendment) (Jersey) Regulations 200-.

Report for GST Bonus Amendment

Subject to States’ agreement of P.163/2008, this Regulation gives effect to the proposed changes to the GST Bonus.

Introduction

The current budget for the GST Bonus is £400,000 with households eligible to receive a fixed bonus of £75 per annum. The Treasury estimates that approximately 5,000 households will claim this bonus.

It is proposed to double the value of the Bonus so that the amount paid in 2009 is £150 per household. The additional cost is estimated at £400,000 per annum. The cost of administration will not increase significantly but it is likely that there will be a slightly higher take-up under the amended scheme.

Increasing the GST Bonus by £75 per annum is equivalent to £1.44 extra per household per week.

It is proposed to alter the timing of the GST Bonus so that applications can be made throughout the year. At present, applications cannot be made until 1 October in a given year. Providing for applications throughout the year will enable applicants to claim the increased benefit of £150 from March 2009, rather than waiting until October to receive any assistance, so that they have the benefit of the Bonus ahead of facing spending pressures, instead of in arrears.

Allowing applications throughout the year is likely to result in a small increase in the number of eligible claims because it will allow people to choose between tax assessments in respect of one or two years previously. However, other than in 2009, each tax assessment will only be able to be used to claim the Bonus once.

Comments on amendments to Regulations

As the Bonus is no longer linked specifically to an offset of average GST on food, the name of the Regulation will be amended by removing the reference to GST, and just referring to a bonus for food costs.

Regulations 3 and 4 – Applications will be allowed throughout the year. Claims made before 1 October will use the Income Tax assessment for two years previous and claims made between 1 October and 31 December will use the Income Tax assessment for the previous year.

The Income Tax assessment for a particular year can only be used to claim the Bonus in one subsequent year. This rule will not be applied to applications made in 2009 to allow applications to be made based on a 2007 tax assessment which has also been used in respect of the application for the 2008 Bonus.

Regulation 5 – the rate for 2009 is set at £150. For 2010 the rate will be increased by the annual increase in food costs as at September 2009. This will be the most up-to-date food index available on 1 January 2010.

Financial and Manpower Implications

There are no manpower implications. Implementation costs, including administration, are estimated at a maximum of £15,000. The cost of the increased Bonus can be met from the Departmental cash limit, subject to the approval of P.163/2008.