Guernsey States pension hike of 6.8% proposed

The proposals would also see reform of the island's social security contributions system

Guernsey's States pension could increase by 6.8% next year.

The Committee for Employment and Social Security (ESS) has recommended the increase, which is higher than the rate of wage growth in 2022.

ESS has also put forward proposals to change when unemployment benefit when local rates of employment go up and down.

The proposals would also reform of the island's social security contributions system.

ESS has also put forward plans to create a formal "double lock" for pensions increases.

Currently the informal double lock sees benefit rates increase by RPIX - a measure of inflation, equivalent to the Retail Price Index (RPI) excluding mortgage interest payments - plus one third of the real increase in median earnings or, if greater, by RPIX.

The proposed new policy would add a "look back" element to the current double lock which would ensure that the one-third policy takes into account changes made in years when benefit rates were increased by RPIX.

A move to stop pensions credits being paid to unemployed parents, whose children are at secondary school, has also been put forward by ESS.

ESS President Deputy Peter Roffey said "we think anyone with a secondary aged child should be able to work."

The Policy and Resources Committee has indicated it will support the proposed changes to contributory benefits.

On the reforms to unemployment benefit Mr Roffey said "in times of low unemployment like we have now, 30 weeks for the benefit to last is too long, as nobody should need that long to find employment.

"However if unemployment spikes we're asking for an ability to change that, and bring it down even as low as to 10 weeks in times of high employment."

The proposals are set for debate in October, after Policy and Resources funding and investment plan, which proposes introducing a GST, reforming the island's tax and social security system and borrowing £350m.