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More Help for Families in 2021?

Social Security is proposing that, in 2021, the benefit limitation is increased by 5% to £890 a week, at a cost of approximately £100,000. An amendment placed by Deputies Dyke and De Lisle seeks to keep the benefit limitation at £850, or, failing that, to increase it to £870.

The benefit limitation – which caps the total amount of weekly income that a family claiming income support can receive from all sources, including earnings – is often misunderstood, both in terms of its purpose and its effects.

Today, the benefit limitation is £850 – which means that if a family’s income (from earnings, family allowance and so on) is £849 a week, they get income support of £1.00 a week.

It’s worth remembering that the benefit limitation doesn’t kick in unless Social Security has already calculated that a family needs more than £850 a week to get by.

The amount of money a family needs to manage – “the minimum amount needed to live on”, to quote Social Security – is known as the requirement rate. Social Security works out a family’s requirement rate by assigning a value to each person in the household.

A family of five – mum, dad and three kids, all under five – in a three-bedroom property will have a requirement rate of £901.14 a week. A top-up from income support will take their total household income to £850, leaving them £51.14 short of the minimum amount that the States itself says a family of that size, in those circumstances, needs to get by.

When talking about the benefit limitation it’s safe to always refer to families being affected, because a single person will never have a requirement rate high enough to get anywhere near £850. And in many instances it’s true to talk about ‘working families’ being affected, because often, the households who rely on income support, and who are affected by the benefit limitation, will contain at least one, and sometimes two, earners.

There is an argument that the benefit limitation should be scrapped altogether. While not going quite so far as that, Social Security has in recent years deliberately increased the benefit limitation by more than RPIX so that it affects fewer households – in other words, so that more families can access in full the financial support the States says they need.

Any successful attempt to stop Social Security from increasing the benefit limitation for 2021, or to increase it by less than 5%, will leave the 21 families who are already getting less than the States say they need still worse off.

Even putting to one side the moral implications of choosing to give already impoverished families less money in real terms, now is not a good time to be tinkering with the mechanics of the benefit system – the States and the Guernsey Community Foundation are midway through a major project looking at the effects of poverty on the Island, ahead of proposing ways to ameliorate those effects by making best use of resources.

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