Shetland Charitable Trust is to push ahead with cutting the Christmas bonus after a proposal to keep offering it to all over-70s proved too expensive.
Trust manager Ann Black advised trustees that such a blanket payment would wipe out the £500,000 a year saving they hope to achieve by streamlining the long-running scheme. If every household with someone over 70 claimed the £300 grant it would also have landed the trust with an unwanted tax demand for nearly £109,000 a year.
Yesterday trustees decided to limit the bonus only to islanders over 60 who are poor enough to qualify for pension credit, housing benefit or council tax relief. It will cut the cost of the increasingly expensive scheme from nearly £1.15 million a year to £605,000 of which only £33,000 will go in tax.
Last month trustees had agreed in principle to cut back the 21-year-old bonus by disqualifying pensioners not on low incomes after hearing that HM Revenue and Customs views them as non-charitable gifts and charges tax of over £200,000. Since it began in 1987 the Christmas bonus has been paid to pensioner households regardless of how well off they were.
While agreeing to an overhaul after years of reluctance, trustees had called for a study to see if people over 60 on council tax and housing benefit could continue to be eligible rather than just those on pension credits. The trust has calculated that would bring just 51 extra people into the fold at a cost of £15,300 a year. At yesterday’s meeting it was agreed to include them.
Councillor-trustee Josie Simpson said it was unfortunate but there was always going to be people who fell just outside the cut-off point for any grant. He backed the streamlined scheme, removing the grant from those not on benefits. He said: “There’s no period of Shetland’s history that everybody has been so well off.” He wanted the trust to ensure there were still funds left for the future so the next generation could live through the same level of prosperity as the present one has enjoyed.
Some other councillor-trustees took a different view. Gussie Angus said an SIC study had shown considerable poverty and deprivation still in Shetland among the elderly.
Meanwhile, a big effort is to be made to persuade pensioners to claim the government benefits they are entitled to so that they are generally better off and can meet the criteria for claiming the Christmas bonus. The trust is to work with the local department of work and pensions and Shetland Islands Citizens Advice Bureau to encourage people to take up their entitlements.
The rules for disabled people qualifying for the bonus will not change under the current review except there will no longer be a restriction on how many disabled people in a single house can claim it.
The SIC has been asked whether it would take over the bonus scheme, probably from next year.
The charitable trust spends 37.4 per cent of its funds on the elderly.