Vol. 449 No. 1
5 Mr. J. Walsh asked the Minister for Social Welfare if he will increase the means threshold for the non-contributory old age pension and, in particular, the means threshold under the national fuel scheme; and if he will make a statement on the matter.[3325/95]
Entitlement to an old age non-contributory pension is determined by reference to the age of the applicant, whether they are resident in the State and whether they satisfy a means test. The means test is similar to that used to determine entitlement to all social assistance schemes and takes account of any income the applicant or his or her spouse or partner may have as well as property, except their home, or assets which are capable of providing an income. It includes an assessment of the value of any capital or investments held by the applicant. For old age non-contributory pension purposes, an initial £200 of capital is disregarded, 5 per cent of the next £375 is assessed and the balance is assessed at the 10 per cent rate. The figure arrived at is then divided by 52 to obtain the weekly means and £1 is added to the weekly value thus calculated.Any improvements in the means test generally would have significant financial implications which could only be considered in the context of additional resources being made available.
The national fuel scheme assists householders who are on long term social welfare or health board payments and who are unable to provide for their own heating needs. One fuel allowance is payable per household. All people in receipt of a non-contributory pension automatically qualify for payment under the national fuel scheme as their means are already assessed as for pension purposes.
At present, where a contributory pensioner and his household have a combined income, from any source, of more than £5 a week above the relevant contributory social welfare pension, they will not qualify for the fuel allowance. However, as announced in the budget, I will be increasing this limit to £10 per week for the heating season commencing next October. The effect of this increase is that more people on low incomes will qualify for the fuel allowance next winter.
I welcome the increase in the allowance under the national fuel scheme for £5 to £10 which will be of benefit to many elderly people who need a great deal more heat than younger people. However, a sum of £6 per week or £300 per annum is derisory in terms of income where an old age pensioner and those on assistance receive a reduced rate on anything they receive over £1 per day.
I agree that many of the social welfare payments are inadequate to meet people's needs and it is my intention to improve that position during my time in office. Deputies will be aware that there has been no increase in the fuel allowance since 1987 and any increase obviously depends on the availability of resources, bearing in mind that a £1 increase in the fuel allowance costs approximately £7 million in a full year.
Given that the Minister is a member of a Government which was quite generous to the banks in the budget, it is not too much to ask him to increase the thresholds for elderly people. Only £200 is disregarded; this is unparalleled in a developed country and leads to much crime in rural areas where people live alone.
Did the Deputy say "crime"?
Yes.
By old people?
May I be allowed to develop my point?
The Minister is seeking clarification.
Only £200 is disregarded before an elderly person qualifies for a reduced pension; this leads to much crime. People at that stage of their lives like to put a few pounds aside. If they lodge money in their local post offices or banks it is considered part of their means, so they tend to leave it in the house. Criminals regularly raid houses and beat these unfortunate people up. Will the Minister increase the amount disregarded in means testing elderly people?
I apologise for my intervention but the Deputy's remarks conjured up visions of elderly people roaming the countryside engaging in crime. I appreciate the point he was making that if they keep money at home this may encourage criminals to burgle them. That is a serious matter and I would encourage any elderly person who has resources to put them in a safe place, preferably a bank or credit union. I am conscious that elderly people in particular fear they will not have enough money to live on, to heat their homes, pay for electricity and so on. I will consider the possibility of adjusting the means test but I caution the Deputy not to raise expectations that anything major can be done in the foreseeable future because of the costs involved in extending it greatly.
The means test does not relate only to the amount of cash on hands; a very small amount of cash would not be taken into account in means testing elderly persons where property and capital are primarily taken into account. It seems fair, in order to allocate the available resources as evenly as possible to those who need it most, that there be an adequate means test.
I would remind the House the time limit for dealing with priority questions is very strict and amounts to merely 20 minutes. I now desire to proceed to another question, Question No. 6, please.
