Dáil Éireann debate -
Thursday, 22 Oct 1987

Vol. 374 No. 5

Written Answers. - Means Testing.

59.

Mr. J. Bruton

asked the Minister for Industry and Commerce 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 ten pence for every pound paid out; the calculations, if any, he has done in respect of each of the means tested schemes or income threshold operated by his Department or by agencies under his aegis; and if he will make a statement on the matter.

60.

Mr. J. Bruton

asked the Minister for Industry and Commerce 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.

Minister for Industry and Commerce (Mr. Reynolds)

I propose to take Questions Nos. 59 and 60 together. As the Deputy will be aware SFADCo operates a graded rent scheme in respect of their rented houses which is similar in most respects to local authority rent schemes. In respect of that scheme the information sought by the Deputy is as follows:

(a) Rents are reassessed annually and are calculated on the basis of the following scales:

Assessable Income	Principal Earners Allowance	Allowance for Children	Rent Fraction
Over £4,067 per annum	£291	£120 per child	1/7
Between £2,904 and £4,067	£435	£120 per child	1/8
Between £2,468 and £2,904	£581	£120 per child	1/9
Between £1,886 and £2,468	£870	£120 per child	1/10
Up to £1,886	£1,003	£120 per child	1/12

Note 1: The allowance for children applies to every child under 16 years of age or who being over 16 but under 21 is attending a full time course of education and is wholly maintained by the tenant.

Note 2: The principal earners allowance will be doubled in the case of old age pensioners, deserted wives, (receiving deserted wives' allowance only), widow (receiving widow's pension only) and social assistance recipient.

(b) One-seventh of the basic income of a subsidiary family earner (which could be a spouse) which exceeds £1,671 per annum and, does not exceed £3,380 per annum i.e. a maximum of £1,709 is taken into consideration in arriving at family assessable income.

(c) Account may be taken of the income of household members other than spouses as described at (b) above.

(d) Account is taken of the costs of maintaining children. An allowance of £120 per child is deducted from family assessable income as outlined in (a) above.

(e) Social welfare payments are taken into consideration in arriving at family assessable income. As the scheme is aimed at people who require rented accommodation because they do not have their own accommodation, home ownership is unlikely to arise.

(f) The value of property, real or personal is not taken into consideration in calculating the graded rent.

(g) The income threshold levels and allowance are revised annually in line with inflation.

(h) The income threshold operation does not distinguish between married and unmarried couples. With regard to your question in relation to the British study

The Reform of Social Security, I was not aware of the results thereof.

It is difficult to assess the specific administrative cost of operating SFADCo's graded rent scheme. However it must be remembered that the scheme operates on the principle of social equity and is similar in most details to the differential rent scheme operated by local authorities throughout the country.