The States pension and benefits including unemployment, sickness and parental allowance are set to increase by 2.6% from January 2021.
Employment & Social Security has submitted a policy letter proposing the uprating of contributions and benefits funded from social insurance for 2021.
A further Policy Letter on benefits funded from taxation, such as income support, severe disability benefit and carer’s allowance, will be brought to the States later this year, alongside the States’ Budget for 2021.
For now, ESS has outlined its plans to increase benefits funded through the Guernsey Insurance Fund without increasing contribution rates.
Pictured: Social Insurance rates are set to remain unchanged in 2021.
In the long-term, however, ESS Vice-President Shane Langlois said higher contribution rates are "inevitable" in order to continue supporting people on benefits.
“While the committee feels that it’s not currently the right time to increase contribution rates, increases in future are inevitable if pensions and other benefit rates are to maintain their relative value," he said.
"These long-term funding issues need to be considered within the overall review of the taxation strategy and the recovery from the Covid-19 crisis.”
Pictured: A table showing which benefits will increase in 2021 under ESS's proposals.
If the committee’s proposals are approved, the full rate of old-age pension will increase in 2021 by £5.79 per week to £228.37 per week.
Parental allowance will go up from £223.02 per week to £228.83.
Unemployment and sickness benefits will increase from £163.80 to £168.07.
In total, the amount of money spent paying out social insurance benefits this year will total around £154m.
That figure will increase to £163m if the proposed benefit increases go ahead.
The proposals will go to the States of Deliberation for final approval.
Pictured top: ESS Vice-President Shane Langlois and ESS President Michelle Le Clerc.
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