The Island Rate: An Explainer

I've just been reviewing the Scrutiny panel - "Parish and Government Review Panel Public Hearing Witnesses: (The Chief Minister and The Minister for Treasury and Resources) Monday, 24 November 2025"

The subject of the Island rate came up. This is a component added to the Parish rates which goes into general revenue.

The Group Director, Strategic Finance commented as follows:

"So the Island-wide rate is paid into the Consolidated Fund as part of general revenues, so it is not ring-fenced for any particular purpose, it is just another revenue line alongside income tax, corporate tax and other elements. I cannot remember exactly, I think when it was established there were other elements of expenditure that were brought in, I think it was to do with the welfare system, but it was before my time. But it is not ring-fenced in a particular way, so it just does form part of general revenues."

Nobody said anything to expand on this! 

Present were Deputy H.M. Miles of St. Brelade (Chair), Deputy C.D. Curtis of St. Helier Central (Vice Chair), Deputy K.L. Moore of St. Mary, St. Ouen and St. Peter. Witnesses: Deputy L.J. Farnham of St. Mary, St. Ouen and St. Peter, the Chief Minister Deputy E. Millar of St. John, St. Lawrence and Trinity, the Minister for Treasury and Resources Mr. A. Hacquoil, Group Director, Strategic Finance Mr. P. Wylie, Chief Officer, Cabinet Office 

Does nobody do any homework, any basic research before asking questions? Do not of the officials ever think about these matters? Nobody interjected with an explanation of how the Island rate came about. Deputy L.J. Farnham was in the States during that time. He should have been able to tell the panel why it came in! I was not in the States then or now but I remember. And anyone raising the matter of the Island rate should at least have done some very basic research. 

So here are the details, easy to find.

The Island Rate: An Explainer

The Island Rate was introduced in 2006 under the Rates (Jersey) Law 2005 specifically to fund the centralised Income Support system, replacing the old parish‑based welfare payments. It was designed to shift the burden from individual parishes to an islandwide contribution, ensuring consistency and fairness in welfare provision Government of Jersey comite.je Jersey Law.

Background

 
Before 2006: Each parish administered its own welfare scheme, funded through parish rates. This meant support levels could vary depending on parish resources.

Reform: The States of Jersey created a unified Income Support system, administered centrally, to standardise welfare payments across the island.

Island Rate: To finance this, a new island wide rate was levied on all ratepayers, collected alongside parish rates.

Purpose of the Island Rate

Offsetting parish transfer: It directly replaced the welfare funding responsibility of parishes, so parishes no longer had to raise money for welfare payments.

Equity: By pooling contributions island wide, it avoided disparities between richer and poorer parishes.

 
Transparency: The Island Rate appears as a separate line on rate demands, making clear that part of the bill supports the central welfare system.

Key Implication

The Island Rate was not a new tax in principle, but a reallocation of responsibility: what parishes used to collect for welfare was consolidated into a single islandwide levy. This ensured that welfare payments were funded consistently, while still keeping the parish rate system intact for local services.

So the Island Rate was introduced to offset the transfer of welfare funding from parishes to the central Income Support scheme. It was a structural reform to make welfare provision fairer and more consistent across Jersey.


Sources: Government of Jersey comite.je Jersey Law