Social Security (Amendment of Law No. 4) (Jersey) Regulations 201-

Information about the publication of Ministerial Decisions

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A decision made 19 November 2012:

Decision Reference: MD-S-2012-0092
Decision Summary Title :	DS - Amendment to Draft Social Security (Amendment of Law No.4) (Jersey) Regulations 201-		Date of Decision Summary:	19 November 2012
Decision Summary Author:	Strategy and Policy Director		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	WR - Amendment to Draft Social Security (Amendment of Law No.4) (Jersey) Regulations 201--		Date of Written Report:	19 November 2012
Written Report Author:	Strategy and Policy Director		Written Report : Public or Exempt?	Public
Subject: Lodge an amendment to the Draft Social Security (Amendment of Law No.4) (Jersey) Regulations 201-
Decision(s): The Minister decided to lodge ‘au Greffe’ for States debate an amendment to the Draft Social Security (Amendment of Law No.4) (Jersey) Regulations 201-
Reason(s) for Decision: This amendment proposes additional transitional protection to individuals aged at least 57 at the end of 2012, in respect of proposed changes to the current eligibility conditions for survivor’s pension.
Resource Implications: There are no resource implications. The total cost of the transitional protection is estimated at a maximum of £2.5 million, over the period 2014 – 2021. This cost will be met by the Social Security Fund.
Action required: Strategy and Policy Director to request that the Greffier of the States lodges ‘au Greffe’ the above-mentioned project and lists it for States debate at the meeting commencing 4 December 2012.
Signature:		Position: Minister
Date Signed:		Date of Decision (If different from Date Signed):

Social Security (Amendment of Law No. 4) (Jersey) Regulations 201-

P.101 Amendment

The amendments to the Social Security Law included in P.101 make two significant changes - the transfer of invalid care allowance into the Social Security Fund and the restriction of the current contributory benefit, survivor’s pension, which is provided to working age survivors from the end of the first year after the death of their spouse/civil partner.

International evidence confirms that the current provision of the Jersey survivor’s pension is very generous and that the proposed restriction in eligibility conditions will align the benefit more closely with other jurisdictions. The existence of the income support benefit ensures that local survivors with a low household income are provided with a financial safety net.

The changes to survivor’s pension will have no impact on individuals already receiving the benefit and survivors with dependent children will continue to be supported. However the intention is that, from 1 January 2013, an individual who becomes a working age survivor and who is not looking after a dependent child, will receive a survivor’s allowance for the first 12 months following the death of their spouse, but will no longer be entitled to receive a survivor’s pension after the end of that first year.

Concerns have been raised in respect of a small group of married women, whose husbands are still alive, who are currently close to pension age, some of whom may have remained as homemakers throughout their adult lives. It is acknowledged that these proposals could cause worry to this group, and that they have not had time to make alternative financial arrangements to take account of the proposed change.

This amendment to P.101 extends the transitional protection to all individuals (men and women) who are at least 57 years old on 31 December 2012. In the event that a spouse of one of these individuals dies before the individual reaches pension age, then the individual will be entitled to receive a survivor’s allowance for one year, followed by a survivor’s pension until the individual reaches their own pension age. For most survivors this will be 65, but some women in this age range will have a pension age of 60. Individuals born in 1955 will have their 57th birthday in 2012 and this group will have a pension age of 65 years and 2 months (born before 1/11/1955) or 65 years and 4 months (born on or after 1/11/1955).

As this additional protection is limited to individuals who will all be at least 57 years old, the maximum period of survivor’s pension that could be paid will be just over 7 years, in respect of someone who has their 57th birthday at the end of December 2012 and who has a spouse who dies in early 2013.

There will be an additional cost in respect of the benefits provided to this group. Using data from the last three years, it is estimated that 125 individuals in this group will claim a survivor’s benefit before they reach their own pension age. The total estimated cost is between £2 million and £2.5 million over the seven-year transitional period.

These costs are limited to that seven-year period and will not be repeated. The youngest individual in this group will reach the age of 64 years and 4 months [1] in early 2020 and from that time, no new claims will be made.

The transitional period has been aligned with other changes to pension provision. The youngest women currently insured within the Social Security Fund with a pension age of 60 will attain that age in 2019. From 2020, the agreed gradual increase in pension age from 65 towards 67 (in 2031) will start to take effect.

Commencement Dates

To allow time for this amendment to be prepared, the scheduled debate of the regulations on 20 November has been transferred to 4 December. An amendment to the commencement date in respect of the minor adjustments to the adoptive parent grant and the insolvency benefit is required. Instead of commencing on 1 December 2012, these amendments will now come into force seven days after the regulations are made. This is not anticipated to create any operational difficulties.

The commencement date for the changes to the home carer's allowance and the survivor’s pension remains as 1 January 2013.

Financial and Manpower considerations

There are no manpower implications

The cost of the provision of additional support to individuals within this group who become survivors before they reach their own pension age is estimated to be no more than £2.5 million in total between 2014 and 2021 during which period this transitional support will have effect. This cost will be met by the Social Security Fund.

[1] Someone who becomes a survivor when they are within 12 months of their own pension age is not eligible for a survivor’s pension now as they will reach pension age during the first 12 months of survivorhood and and will be transferred directly to an old age pension. This will not change.