asked the Minister for Social Welfare if he is aware that where an old age pensioner has savings in the Post Office Saving Bank the interest is 2½ per cent., but that under the regulations governing means for a non-contributory old age pension, a return of 5 per cent. is assumed for all capital after the first £25; and if as, this regulation is unfair to Post Office depositors who are applicants for an old age pension, he will alter the regulations applicable in these cases.
Ceisteanna—Questions. Oral Answers. - Pensioners' Post Office Deposits.
4.
I am aware of the rate of interest on deposits in the Post Office Savings Bank, and in the method of determining the yearly value of capital for non-contributory old age pension purposes. That method is laid down by law in Part I of Rule 1 of the Seventh Schedule to the Social Welfare Act, 1952, and it is not confined to Post Office Savings Bank deposits. It provides that the first £25 of capital is to be excluded. The next £375 is assessed at an annual value of 5 per cent. and any capital in excess of £400, at an annual value of 10 per cent. This is in fact generous provision because the annuity value at age 70 is over 12 per cent. in the case of a male and nearly 11 per cent. in the case of a female. To assess the annual value merely at the 2½ per cent. rate payable on Post Office deposits would be to recognise a pensioner's right to preserve his capital intact for the benefit of his heirs. The maximum amount which can be held on deposit in the Post Office Savings Bank is £3,000 producing an income of £75 per annum. If this were the claimant's only means and the method of assessment were altered on the lines suggested in the question an old age pension of 18/6d. a week would be payable. This would be Wholly unreasonable in the view of the fact that such a person could purchase a life annuity of about £380 in the case of a man and about £320 in the case of a woman. Even as the law stands, a person with no other means could have £737 10s. 0d. on deposit and still qualify for the maximum pension of 28/6d. or £1,260 and still qualify for the minimum pension of 13/6d.
I cannot therefore agree that the method of assessment provided for in posess capital sums of money and who are seeking State pensions to which a means test applies.