asked the Minister for Social Welfare if, in view of falling deposit interest rates, he will reduce the 10 per cent assessment rate applied to capital sums for means test purposes.
Ceisteanna—Questions. Oral Answers. - Means Test Capital Assessment.
5.
Applicants for social assistance payments who have capital are assessed with a notional income from the capital. The percentage rates used vary but the maximum 10 per cent rate of assessment is applied under the old age pension and unemployment assistance schemes to amounts of capital over a certain level.
The assessment system is not related to interest actually earned but rather is based on the determination of a capital value. Under the old age pension scheme a person can have means from all sources of up to £6 a week and still qualify for the maximum pension. In the case of a married couple this would be £12 per week. In relation to capital alone, under existing arrangements, a married couple could have joint capital of over £5,900 and still qualify for maximum pension. They could have joint capital of over £51,000 and still qualify for minimum rate of pension.
The current assessment is not greatly out of line with rates of return which can be obtained on investments. For example in relation to long term investments the representative yields on Government securities are currently around 9.5 per cent.
I am at present examining the possibility of rationalising the different methods of assessing the value of capital under the social assistance schemes within the financial constraints which exist.
Can the Minister tell me when the rate of 10 per cent was struck?
I do not know whether I have the precise date on the file but it has been in existence for a long time. The rates have been up and down and, as the Deputy will be aware, they have been very high.