Jersey

Jersey tax rise to pay for long term care

  • 11 December 2013
  • From the section Jersey
King Street
Every Jersey taxpayer will make a contribution towards the cost of long term care.

Taxpayers in Jersey will make a compulsory contribution towards the cost of long term care, after a vote by politicians.

Under the plan the maximum contribution will start at 0.5% in 2015, rising to 1% in 2016 and will be 3% by 2044.

A Social Security Department spokesman said it would go towards the high costs of residential and home care.

It means home owners will not have to sell their property or use other assets to pay for care in their old age.

'Significant costs'

Senator Francis Le Gresley, the social security minister, said with one in four people expected to need long-term care at some point it was an important development.

He said the money would help remove the worry many islanders currently face of paying for their care in later life.

Senator Le Gresley said: "We have significant costs going forward, not just for individuals but for the state. That is why this new fund and new contribution will help us cover this cost."

The minister said people earning less than the 20% standard tax rate would pay a reduced contribution. He said: "If someone has an effective rate of 10% they will only pay half of the long term contribution rate.

"The use of the fund will be available for people who are asset rich but cash poor.

"They may have value in their property but a low income. They will be able to borrow from the fund to cover care costs.

The Social Security Department spokesman said over the next three decades the number of people who are retired will rise while the number of people working will remain the same.

The department said by 2045 it is thought it will drop from four people of working age per retired person to two.

People needing support will get help paying for long term care after they have contributed the first £50,000 towards the cost of their own care.

The payment will not cover everything as care home residents will be expected to pay £300 a week for accommodation and living costs.

For people not able to afford that amount there is means tested support or property bonds, which would be paid back after the death of the homeowner.

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