In brief: Deputy Max Andrews has lodged a Budget amendment proposing to abolish the upper-earnings limit on social security and long-term care contributions. He argues the move would generate millions for both funds and prevent the burden of plugging structural deficits from falling disproportionately on lower and middle earners. The amendment will be debated at the States sitting beginning 8 December.
The Cap in Question
At present, the Jersey Evening Post reports, the upper-earnings limit stands at £331,584 a year. Earnings above that threshold are exempt from long-term care tax for individuals and from social security contributions for employers. In other words, once a high earner clears that bar, the meter stops running. Everyone else keeps paying.
Deputy Max Andrews, representing St Helier North, wants to change that. His amendment to the 2027 Budget would remove the cap entirely for both funds, on the basis that structural deficits in each make the current arrangement unsustainable. According to the JEP, scrapping the social security cap alone would generate an additional £11.3 million for the Social Security Fund by 2030, turning a projected decrease in the fund’s value of more than £31 million into a net positive. His amendment also forecasts £11.5 million for the Long-Term Care Fund.
Andrews vs the Council of Ministers
Deputy Andrews is not merely proposing an alternative funding model; he is explicitly rejecting the Council of Ministers’ existing approach. The ministerial plan involves increasing long-term care contributions to 2.5 per cent between 2028 and 2030, a proposal Andrews says he does not support.
His objection is straightforward. “I do not however support the Council of Ministers approach levying the Long-Term Care uprate on lower- and middle-income earners whilst those on the highest incomes are levied a lower effective rate,” he said in his amendment, as reported by the JEP.
He went further: “I believe everyone should contribute a proportionate amount of Social Security and Long-Term Care contributions. We cannot allow this situation to continue where colleagues prefer to levy tax increases on low and middle income over high-income earners.”
It is a pointed critique of his own government’s fiscal strategy, and one that will make for lively reading in the corridors of Broad Street.
Déjà Vu in the Chamber
This is not the first time such a proposal has landed on the States’ order paper. The JEP notes that an almost identical amendment was put forward by Deputy Tom Coles during last year’s Budget debate. That attempt was voted down in two parts: the social security element was defeated by 30 votes to 13 with one abstention, and the long-term care proposal was rejected by 28 votes to 16.
The arithmetic of the Assembly has not changed dramatically since then, which means Deputy Andrews faces a steep climb. Whether the worsening picture of the structural deficit, or the political optics of being seen to protect the highest earners, shifts enough votes between now and 8 December remains to be seen.
The Budget and all associated amendments are scheduled for debate at the States sitting beginning Tuesday 8 December.
Source: Jersey Evening Post
