THE income support scheme will combine welfare, housing, educational maintenance grants and non-contributory benefit systems in a single assessment and payment package from 2007, if the States agree.

And the president of the Employment and Social Security Committee, Senator Paul Routier, says that although the system will be made more efficient, the proposed income support scheme is not a cost-cutting exercise.

Senator Routier said that the existing benefit budget – £51 million in 2004 – would continue to be increased annually and that Finance and Economics had agreed an additional £20 million to phase the new system in over seven years, and another £2 million to offset the effects of a sales tax on low earners.

He said: ‘This has not been a cost-cutting exercise or anything like that.

We have been to Finance and P&R and explained the issue to them.

They have given us an assurance that they will identify a sum of up to £20 million to be spent over a number of years in the transition period.’