Benefits bill puts pressure on budgets

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SPIRALLING benefit payments will put the budget of the Department of Social Care under the greatest pressure of any government department in future years, the Chief Minister admits.

Draft government accounts show that the bill for income support payments rocketed by £2.8 million last year as more people were drawn into the benefits system as the economic slowdown made itself felt in the island.

Increased benefits payments were largely responsible for the Department of Social Care overspending by £0.4 million in 2011/12.

Mr Bell said that while sectors of the economy were still growing, there were signs of a slowing down and this was reflected in the increasing demand on the benefits system.

He said: ‘Social Care’s budget will be the biggest problem we will have.

‘We have to be very conscious of the impact of a slowing economy on government revenues. Our initial concern is with the usual reduction in tax receipts but also a reduction in National Insurance receipts and the increase in demand for benefits which if it goes unchecked will seriously distort the budget for Social Care at a time when it is already under severe financial pressure.’

He said the pay freezes and rising food and fuel prices were putting pressure on household budgets and forcing people towards the benefits system. Many of those on state support would still be in work but had fallen back on part-time jobs and were claiming benefit to top up their income.

A review of the benefits system is under way.

Mr Bell said Social Care Minister Chris Robertshaw was working hard to ensure that benefits were better targeted to where they were needed most.

He said that in the main, departments across government had responded well to the need to reduce expenditure and most had come in under budget.

In a written reply to a House of Keys question from Onchan MHK Zac Hall, Mr Robertshaw revealed that detected benefit fraud has risen from £126,765 in 2010 to £168,280 in the year ending March this year.

He said this represented 0.07 per cent of the total social security bill of more than £240 million.

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