asked the Minister for Social Welfare if his attention has been drawn to the fact that a British study The Reform of Social Security by Dilnot, Kay and Morris, published by the Institute of Fiscal Studies, page 44, estimated that the administrative cost of operating the means test for supplementary benefit was 10 pence for every pound paid out; the calculations, if any, he has done in respect of each of the means tested schemes or income thresholds operated by his Department or by agencies under his aegis; and if he will make a statement on the matter.
Written Answers. - Means Testing.
55.
The study referred to by the Deputy was a critique of the British tax and social security systems and the interaction between the two systems as they affect individuals. It was argued that the existing systems represent an inefficient use of resources and the cost of administering the supplementary benefit scheme was quoted in support of this. The 10 per cent figure referred to represents not only the cost of means testing as such but the overall cost of administering the scheme.
Administration costs overall represent around 4 per cent of total social welfare expenditure. A breakdown of those costs into amounts appropriate to different schemes is not available. However a review of administration costs is being undertaken within the Department with a view to providing a more efficient and cost-effective system. All aspects of administration are being taken into consideration in the context of this review.
56.
asked the Minister for Social Welfare if he, or any body under his aegis, operates means tests or income thresholds for any purpose, for example tax exemption, eligibility for charge or benefit; in respect of such means test or income thresholds (a) the levels at which they operate and the period over which they are assessed; (b) if account is taken of the income of a spouse, and if so, the way in which this has been done; (c) if account is taken of the income of other household members; and if so, the way in which this has been done; (d) if account is taken of the costs of maintaining dependent children or other dependants; (e) if any income for example social welfare payments, or the imputed value of home ownership is ignored or discounted in any way; (f) if the value of property, real or personal, is included and if so, the basis on which it is included; (g) when the levels were last revised in line with inflation; and (h) if there is a distinction in the way the means test operates between a couple who are married and a couple living together but not married.
The Department of Social Welfare operate means tests/income thresholds to determine eligibility and amount of the entitlement under the following schemes:
Unemployment assistance, widow's (non-contributory) pension, orphan's (non-contributory) allowance, social assistance allowances for deserted wives, unmarried mothers, prisoners' wives and single women aged from 58 to 66, old age pension, blind pension, family income supplement and rent allowance for tenants affected by the decontrol of rents.
The health boards operate a means test in respect of the supplementary welfare allowance scheme which they administer under the general direction and control of the Minister for Social Welfare. They also operate means-tests under the national fuel scheme for applicants who have not been means-tested already under other social welfare schemes.
All the schemes, with the exception of the rent allowance and national fuel schemes, are provided for in the Social Welfare (Consolidation) Act 1981, as amended by subsequent Social Welfare Acts, which contains the rules as to calculation of means: see section 146 (unemployment assistance), section 210 (supplementary welfare allowance) and Third Schedule — rules as to calculation of means (other schemes). The upper means limit for payments under these schemes is related to the level of social welfare payments, which are increased annually.
The rent allowance for tenants affected by decontrol of rents, and the relevant rules for the assessment of means, are provided for in the Social Welfare (Rent Allowance) Regulations, 1982 (SI No. 220 of 1982). The income level at which the maximum allowance is payable is adjusted by amending regulations to take account of general increases in social welfare payments: the relevant Statutory Instruments are Numbers 186/83, 171/84, 236/85, 218/86 and 152/87.
The national fuel scheme is a non-statutory one which is targeted at certain categories of persons who are receiving social welfare payments and have no other significant income and persons over 66 years of age who, while not receiving a social welfare payment, have a corresponding level of income. Applicants under the scheme who are receiving payments which are not subject to a means test already are means tested to establish if they meet the criteria mentioned; those receiving means-tested payments are accepted as meeting the means criteria of the Scheme.
Pay-Related Benefit Ceiling
Section 73 of the Social Welfare (Consolidation) Act, 1981, provides for a limit to be prescribed to the reckonable weekly earnings in the relevant income tax year to be taken into account in calculating the amount of pay-related benefit payable. The ceiling, which currently stands at £220 a week, was last increased in 1983 by the Social Welfare (Pay Related Benefit) (Amendment) Regulations 1983 (SI 92/83).
Benefit Limits
The combined total of flat rate benefit and pay-related benefit payable in any case is subject to a limitation of 85 per cent of current net weekly earnings in the case of unemployment benefit claimants and 75 per cent of gross reckonable earnings in the relevant income tax year for disability benefit claimants. These limits are prescribed in the Social Welfare (Pay Related Benefit) Regulations, 1979 (SI 141/79) as amended by the Social Welfare (Amendment of Miscellaneous Social Insurance Provisions) Regulations, 1984 (SI 90/84).
Pay-Related Social Insurance Contribution Ceiling
Section 10 of the Social Welfare (Consolidation) Act, 1981, provides for the payment of pay-related social insurance contributions by employed contributors and their employers. It also provides that such contributions are not payable on earnings above a certain level which, in accordance with section 5 of the Social Welfare Act, 1987, stands at £15,500 since April 1987.
The following additional information applies to unemployment assistance:
(a) Means vary according to the circumstances of the applicant and household and the period is the succeeding year or the previous year;
(b) Yes, in accordance with the provisions of section 146 of the Social Welfare (Consolidation) Act, 1981, as amended by the Social Welfare (No. 2) Act, 1985, which set down the rules for the calculation of means;
(c) Yes, in accordance with section 146 (e) when assessing the value of benefit and privilege;
(d) No, but if UA/UB is paid then allowances are also paid for dependent children;
(e) Social welfare payments are not taken into account and neither is the value of home ownership personally used;
(f) Yes, in accordance with section 146 (c);
(g) Means are subject to review and such review would reflect the current position;
(h) Payments provide for aggregate needs of married couples and account is taken of aggregate means in these cases. In the case of an unmarried couple who are living together, in assessing the means of the applicant, the value of any benefit or privilege enjoyed by him or her from any source, including the person he or she is living with, is taken into account.
Income Thresholds
On the implementation, in November 1986, of the equal treatment provisions contained in the Social Welfare (No. 2) Act, 1985, a limit of £50 a week was set in the case of a spouse's income for the purposes of determining adult dependancy — see SI 369/86.
Regulations made under Section 29 (5) of the Social Welfare (Consolidation) Act, 1981 provide for a person engaged in subsidiary occupation to be treated as unemployed if his earnings or profit from this occupation do not exceed £4 a day. This rate was set in July 1986.
Section 73 of the Social Welfare (Consolidation) Act, 1981 as amended by section 7 of the Social Welfare Act, 1987 provides for the payment of pay-related benefit where earnings exceed £62 a week. This weekly earnings figure has been revised annually in recent years.
The following additional information applies to old age (non-contributory) pensions:
(a) the upper means limit for eligibility, subject to (d), is £50 weekly; the income assessed is normally that which may reasonably be expected to be received in the year following the date of calculation
(b) yes; the applicant's means are taken to be one half of the total means of the couple
(c) no
(d) an increase of pension is payable, and in certain circumstances the upper means limit may be extended, in respect of a dependent child
(e) income from a number of sources, including social welfare payments in general, is disregarded as is the value of a dwelling owned and occupied
(f) means derived from property are calculated on the basis of the capital value of the property in accordance with the method set out in the Third Schedule of the Social Welfare (Consolidation) Act, 1981
(g) July, 1987
(h) persons living together but unmarried are treated as single individuals.
The following additional information applies to the non-contributory schemes for widows, deserted wives, unmarried mothers and prisoners' wives:
(a) the upper means limit for eligibility, subject to (d), is £50 weekly; the income assessed is normally that which may reasonably be expected to be received in the year following the date of calculation
(b) No. By definition, there is either no spouse on these schemes or, where there is a spouse, he is not contributing substantially to the claimant's support.
(c) no
(d) An increase is payable, and in certain circumstances the upper means limit may be extended, in respect of a dependent child
(e) Income from a number of sources, including social welfare payments in general, is disregarded as is the value of a dwelling owned and occupied
(f) Means derived from property are calculated on the basis of the capital value of the property in accordance with the method set out in the Department's booklet SW4
(g) July, 1987
(h) Not relevant to these schemes. If the claimant is cohabitating, this disqualifies her under the schemes.
The following additional information applies to the scheme for single women aged from 58 to 66:
(a) Means vary according to the circumstances of the applicant and household and the period is the succeeding year or the previous year
(b) By definition, there is no spouse in these cases
(c) Yes, in accordance with section 146 (e) when assessing the value of benefit and privilege
(d) These claimants would not have dependent children
(e) Social welfare payments are not taken into account and neither is the value of home ownership personally used
(f) Yes, in accordance with section 146 (c)
(g) Means are subject to review and such review would reflect the current position
(h) Not relevant to this scheme. If the claimant is cohabitating, this disqualifies her under the scheme.
The following additional information applies to supplementarty welfare allowance:
(a) Any means up to a ceiling equal to the maximum rate appropriate to the person's family circumstances are relevant for SWA purposes. In keeping with the short-term and emergency nature of the scheme, current means are assessed.
(b) Income of a spouse is assessed in the same way as the income of the claimant
(c) The net profit on contributions received by a head of household from other members is assessed. In the case of a person who is a member of a household, the value of any benefit or privilege enjoyed, such as free board and lodging, is factually assessed
(d) Rates of weekly payments etc. correspond to family sizes
(e) Property, personally used or enjoyed, is not assessed; neither are child benefit payments and domiciliary care allowances for handicapped children
(f) The value of property not personally used or enjoyed is assessed. The capital value of any such property, including savings and investments, is accorded a weekly value under the statutory rules for calculating means
(g) means limits are related to the rates of payment and rise in step with increases in rates of payment
(h) Payments provided for aggregated needs of married couples and account is taken of aggregated means in these cases. In the case of unmarried persons living together, each would be assessed in his or her own right as would, for example, any profit derived from contributions made in respect of board and lodgings by either party. In the case of rent supplements payable under the supplementary welfare allowance scheme, members of the household are expected to contribute to rent according to their financial circumstances and such contributions, whether actual or imputed, are assessed.
The following additional information applies to family income supplement:
(a) Thresholds depend on numbers of qualified children, for example £104 a week for a one child family and rising by steps of £22 a week to £192 a week for a five child family, which is the maximum covered. Income for the previous six weeks (weekly paid) or two months (monthly paid) is taken into account
(b) Yes; the procedure is the same for both partners.
(c) The net profit on contributions received by a head of household from other members is assessed
(d) Account is taken of dependent children (maximum five) in the threshold steps
(e) Yes; the disregards are specified in article 4 of the Social Welfare (Family Income Supplement) Regulations, 1984
(f) No
(g) 23 July 1987
(h) Yes.
The following additional information applies to rent allowance for tenants affected by decontrol of rents:
(a) Thresholds for maximum allowances are £96 a week for married couples; £55 a week for single or widowed persons. The income assessed is normally that which may reasonably be expected to be received in the succeeding 12 months
(b) Yes; the procedure is the same for both partners
(c) Members of the household are expected to contribute to rent according to their financial circumstances and such contributions, whether actual or imputed, are assessed
(d) Yes, the threshold rises for each dependent child
(e) Disregards are specified in article 6 of the Social Welfare (Rent Allowance) Regulations, 1982
(f) The value of property not personally used or enjoyed is assessed. The capital value of any such property, including savings and investments, is accorded a weekly value under the statutory rules for calculating means contained in the article referred to in (e)
(g) 16 July 1987
(h) Yes, an unmarried tenant would be treated as an applicant who was single and the other person would be required to contribute to the rent as in (c) above.
If the Deputy requires further information on these subjects, the Department will make it available to him.