Benefit and Contribution Rates for 2008 - Large contribution increases for high earners and employers

View the previous news item for Guernsey

13 September 2007

Pensions and other contributory benefits will be increasing by 6% from next January if the States of Guernsey approves the Social Security Department's recommendations. Supplementary benefit, family allowances and other taxation-funded benefits will go up by 4.7%, which is the most recent RPI figure.

Single pensioners will get an extra £9.25 per week, with a full rate pension increasing from £151.50 to £160.75. Pensioner couples will get an extra £13.75 per week, increasing their joint pensions to £241.25.

Family allowances will increase from £13.20 per week per child to £13.85, and prescription charges will increase by 10p, to £2.70 per item from 1 January 2008.

High earners and their employers will see big increases in their Social Security contributions from January, as a key part of the zero-10 Fiscal and Economic Strategy takes effect.

Social Security are recommending that the upper earnings cap for contributions should go up from £53,664 per year to £64,896 per year. That will mean self-employed people with earnings of £65,000 or more paying an extra £1,179 in contributions. An employed person earning £65,000 or more will pay an extra £680 per year. A non-employed person under 65 with income over £65,000 will pay an extra £1,112 in contributions and a non-employed person over 65 will pay up to £292 per year more in contributions.

There are bigger increases in store for employers. Their contribution rate will increase from 5.5% to 6.5% of employees' earnings and the upper earnings limit for employers will increase from £53,664 to £108,108. So the maximum amount payable by an employer will increase from £2,952 per year in 2007 to £7,027 per year in 2008.

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Further information:
Benefit and contribution rates for 2008

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