THE States will be able to vote to remove the earnings cap on social security contributions. Peter Roffey will bid to amend Policy Council proposals which would see it increase to £60,000.

He wants the limit to be £100,000 or for it to be removed altogether.

‘At the moment, no one pays more than the realistic cost of their own benefits. Once we move away from that principle, which is what the Policy Council is suggesting, I think the logical extension is to set the ceiling as high as is practical,’ said Deputy Roffey.

He added that ideally, there would not be one.

He said that the further you went above £60,000, the smaller the percentage of somebody’s income would be paid in social security contributions.

‘In the absence of any avoidance procedures, the advice that I’ve received is that if you go much above £100,000 then it would be worth the while of wealthy people setting up mechanisms to avoid paying at all.’

He said his proposals would raise an extra £8m. per year.

‘We are set to deplete our reserves quite considerably. That money would be very useful not only to maintain those reserves, but also spend sufficiently on public resources.’

But the majority of Social Security Department members are against lifting the limit.

‘Just two weeks ago, the States discussed the corporate anti-poverty plan and many members called for faster progress and more commitment,’ said minister Mary Lowe.

‘But if they approve the Policy Council’s proposals, they’ll be chopping the subsidy for the pension contributions of people earning below the limit and transferring some of the cost to the higher earners.’

She added that if the limit was increased to £60,000, it would be just a hidden tax.

And she said Deputy Roffey’s proposals were worse yet.

‘We already have a system where earnings are taxed without an upper limit and that is called personal income tax. But then we have Deputy Roffey apparently supporting the introduction of a cap on income tax at £250,000 a year.’

Deputy Roffey said it would be nice to support the principle that Social Security was advocating, but that it was ignorant of the reality that the island was facing leading up to 2008.

‘I’m very worried that we are being over optimistic over how tightly we can maintain States expenditure without causing structural damage to our vital social services,’ he said.