A temporary 2% cut in workers' Social Security contributions has been approved by Jersey States.Between 1 October 2020 and 30 June 2021, employees will pay 4% of their earnings into the social Social Security Fund, rather than the usual 6%.Self-employed islanders will also see a 2% reduction, from 12.5% to 10.5%.There will be no change to employer contributions.It will cost the Social Security Fund about £26 million.
The Social Security Fund is in a very strong position and we are not pulling money out of it, this is about making sure people have money in their pockets. This is a 2% payrise for working people, and I think many islanders will appreciate it at this time.
The measure is designed to increase the take-home pay of around 55,000 workers and self-employed people in the island. It's part of the £150 million financial support package announced by the government in July, to help the the economy recover from the effects of the Covid-19 pandemic and resultant lockdown.However, several States members questioned whether the reduction should be means-tested.
We need to target the needy, not hand out a bonus to those who clearly do not need this. At some stage this will have to revert, and then the people on the lowest wages will suffer the most.
The States approved the 2% reduction by 40 votes to 5