Trustees urged to reject Christmas bonus payout to everyone over 70

John Robertson June 30, 2009 0

Shetland Charitable Trust may push ahead with cutting the Christmas bonus this week after a proposal to keep offering it to all islanders over the age of 70 turned out to be very expensive.

Trust general manager Ann Black. Click on image to enlarge.

Trust manager Ann Black has advised trustees that such a blanket payment would wipe out the half a million pound a year saving they had hoped to achieve from streamlining the long-running scheme. If every household with someone over 70 claimed the £300 grant it would also land the trust with an unwanted tax demand for nearly £109,000 a year.

The fresh figures will be discussed at a meeting on Thursday to help trustees decide whether to follow Ms Black’s advice and give the bonus only to islanders over 60 who are poor enough to qualify for pension credit, housing benefit or council tax relief. It would cut the cost of the increasingly expensive scheme from nearly £1.15 million a year to £605,000, of which only £33,000 would go in tax.

Trustees agreed in principle last month to cut back the 21-year-old bonus by disqualifying pensioners who are not on low incomes after hearing that HM Revenue and Customs treats 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 an overhaul after years of reluctance, trustees said they wanted people over 60 on council tax and housing benefit to continue being eligible, not just those on pension credits. The trust calculates this would bring just 51 extra people into the fold at a cost of £15,300 a year. Ms Black has backed that move.

Meanwhile, a big effort is to be made soon 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 charitable trust spends 37.4 per cent of its funds on the elderly.