GST and the Community Costs Bonus

With the introduction of GST at 3% in 2008, the government of the day provided for 3 sets of compensating measures.

  • Tax allowances were increased over and above the usual annual uplift, to benefit all taxpayers
  • Income Support payments linked to household spending were increased by 3%.
  • For households that did not pay tax and did not receive Income Support, a new annual “GST bonus” payment was provided to fully compensate these households in respect of the annual cost of GST on food for an average family receiving the bonus.  At the time this was calculated at £75 a year.

The “GST Bonus” was increased in 2009 to £150 a year following a States debate. 

In 2011, the rate of GST rose from 3% to 5%.  Income support components were uplifted in line with this increase.  The “GST Bonus” was also increased  to fully reflect the increase to 5% during the year.

The element of GST on food to fully compensate the annual cost of 5% GST on food for an average family receiving the bonus at that time was calculated at £150. 

The 2011 value was set at £193.36 and the 2012 value showing the full year impact of GST at 5% was £218.36. The value of the “GST Bonus” continued to increase each year linked to the increase in food prices from 2013 to 2016. The “GST Bonus” was then paid at a fixed value of £226.95 a year from 2017 to 2019.

In 2020 an increased value for the Bonus was agreed at £258.25 a year. This amount was also paid in 2021.

In 2022, as part of the mini budget, two changes were made to the Bonus payment. The value was doubled for 2022 to £516.50.

The eligibility was extended to include households that did have a tax liability in the previous year (2021).  The 2022 bonus is available to households with an annual tax liability in 2021 of up to £2735.

The current calculated estimate for the GST levied on the food costs of an average second quintile family now stands at £209 a year.

The name of the Bonus has changed over the years as the value has increased to reflect more than just the amount of GST in respect of the food costs of an average second quintile household. The current name is Community Costs Bonus.

Since 2008 the Bonus has been available to households who do not benefit from the ongoing support provided through the increased tax allowances and increased income support payments introduced alongside the implementation of GST and embedded within those systems ever since.

These are households:

  • that do not have a tax liability in the previous year
  • that do not receive income support
  • where one adult has lived in Jersey for at least 5 years.

The 2022 payment is unusual in that it has been extended to households with a tax liability up to £2,735 a year.

The Bonus is currently paid through 3 yearly regulations which have been amended and renewed several times since 2008. 2022 is the last year of the current regulations. New regulations will be drawn up for 2023.

The payments are usually made in the autumn with a simple online form available to register a claim. The CLS department will help anyone who prefers to make an application over the phone or in person.

GST (Goods and Services Tax)

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