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Dáil Éireann debate -
Thursday, 16 Feb 1967

Vol. 226 No. 9

Ceisteanna—Questions. Oral Answers. - Old Age Pension Means Test.

84.

asked the Minister for Social Welfare if he is aware that where a farm of up to £30 valuation is transferred to one or more of an applicant's children the retired farmer and his wife may obtain two full non-contributory pensions to supplement the family farm income, while a farm employee's wife is not permitted to receive the non-contributory old age pension at age 70 while her husband remains at work, whether over or under 70 years of age; and if he will arrange to modify the means test in order that the farm employee and his wife may obtain the same social welfare benefits as property owners of £30 valuation.

The two situations are not properly comparable: the farmer mentioned is no longer a property owner, nor is he entitled to the income from the farm, while on the other hand the employee continues to receive wages.

I might mention that in assessing the means of a married couple the means of each is calculated as half the total means, subject to the concession that where both are over age 60, £165 of cash income, such as wages, is ignored in calculating the means of the older member of the couple. This concession should be of benefit to a farm employee or his wife particularly where he is not in all-the-year-round employment. Further, as time goes on more and more farm employees should qualify for contributory old age pension for which there is no means test and no retirement condition.

85.

asked the Minister for Social Welfare if it is a fact that applicants for non-contributory widows' pensions with capital are assessed at five per cent interest on their capital disregarding the first £100; that when they attain old age pension age they are assessed at five per cent on the first £400 disregarding the first £25, and ten per cent on anything over £400; if so, if he is aware that many persons get a lower rate of old age pension than the former rate of widow's pension because of the difference in assessment; and what steps he proposes to take to rectify the position.

The methods used for the calculation of means derived from capital for widows and for old age non-contributory pension purposes are as stated by the Deputy. Prior to 1963 the same method was used for both pensions but provision for the more liberal assessment of means derived from capital in the case of widows was included in the Social Welfare (Miscellaneous Provisions) Act of that year. The reason for the change lay broadly in the fact that a high proportion of widows are left with young families and have to face not only a major economic adjustment on the death of the husband but also problems of rearing and educating their children which do not arise in the case of female old age pensioners. The number of widows with capital who are awarded an old age pension at a lower rate because of the different method of assessing the annual value of capital is small and I am satisfied that no hardship is caused.

Would the Minister not agree that a widow who attains the age of 70 would be as much in need of the same rate of pension as before she was 70? Surely he does not think that a lesser pension is not a hardship?

No. Ignoring the first £25 of capital applying to widows up to 1963 applies to non-contributory old age pensioners at the moment. In order to make it easier for widows, the amount in their case was raised to £100 in that year, that is, to provide for widows at an age when they would be likely to have young children to bring up and educate. In other words, the means test was liberalised in the case of widows in 1963. Until then, it was the same as applies now to old age pensioners. What the Deputy is asking is that we should also liberalise it now for non-contributory old age pensions.

For the purposes of assessing income in the case of a widow, it is only charged at five per cent for whatever amount she has, while in the case of an old age pensioner, it is at five per cent on the first £400 and ten per cent after that. That imposes a further penalty on a widow when she attains the age of 70.

These are the statutory provisions for assessing the means test that applies to old age pensioners. This system of assessing means applied to both widows and old age pensioners until 1963 when it was liberalised in favour of a widow, presuming that she had greater responsibilities for the education of a young family, as occurs in many cases.

Many widows attaining the age of 70 are much more deserving of their pension rights.

I am sure they are.

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