142 % Increase In Voluntary Contributions Is Disproportionate Says GSD

142 % Increase In Voluntary Contributions Is Disproportionate Says GSD - Your Gibraltar TV (YGTV) by YGTV Team on 14 July 2021.

The GSD says it has been advised that letters have been sent to individuals making “voluntary contributions of £15 a week towards their old age pensions that as from 1st July 2021 this will increase by £21.30 to £36.30 a week representing a 142% increase.”

Roy Clinton the GSD Shadow Minister for Public Finance stated:

“The Government made no specific mention of these increases in the rate of voluntary contributions when the general increase in Social Insurance contributions for employees and employers was announced in its press release on 24 June 2021. The legal notice in the gazette merely states that Voluntary Contributions would be at ‘such rate per week as corresponds to the maximum weekly amount payable by an employee.’

The Government in its press release of 28 June 2021 makes reference to addressing a number of what it calls anomalies in the rate of Voluntary Contributions suggesting that the GSD was responsible for a system ‘ where for example a person can pay £6 and receive the same benefits as someone paying £30.’

This is to ignore the fact that it is understood that voluntary contributors are paying ‘stamps’ at a rate to cover contributions towards the Statutory Benefits fund only which is why the rate has always been lower than the maximum employees have paid.

The last time Voluntary Contributions were increased by the GSLP/Liberals was on 1 April 2017 from £13.71 to £15 representing a 9.4% increase, obviously the then GSLP/Liberal Minister for Social Security the Hon. Gilbert Licudi QC did not view the lower contribution rate as an anomaly that needed correcting.

If the Government is minded to increase the employee maximum SI contribution by 20% then by the same reasoning Voluntary Contributions should have increased by 20% from £15 to £18 per week. To increase it to £36.30 is to ask Voluntary Contributors for an extra £1,107.60 per annum which some can ill afford.

The Government is seeking to overturn a voluntary contribution methodology previously accepted by itself as being equitable with no notice or transition period for those so adversely affected.

I would thus urge Sir Joe Bossano to reconsider the Government’s position.”