Written Answers. - Social Welfare Benefits.
John O'Leary
Question:
43
Mr. O'Leary
asked the
Minister for Social Welfare
if his attention has been drawn to recent projections that inflation will increase to at least 3 per cent in 1995; the plans, if any, he has to increase the rate of social welfare payments from the 2.5 per cent announced in the 1995 budget; and if he will make a statement on the matter.
[10641/95]
Ivor Callely
Question:
49
Mr. Callely
asked the
Minister for Social Welfare
if his attention has been drawn to the public anger over the social welfare increases in 1995 which are the lowest increase in recent years; if his attention has further been drawn to the inflation forecast of approximately 3 per cent which will leave most social welfare recipients worse off than ever before; and if he will make a statement on the matter.
[10563/95]
Dermot Ahern
Question:
53
Mr. D. Ahern
asked the
Minister for Social
Welfare, in view of the fact that inflation is now running at 3 per cent, if the recent increase in social welfare payments ranging from 1.96 per cent to 2.5 per cent will mean that social welfare recipients' buying power will actually shrink; and if he will make a statement on the matter.
[10527/95]
I propose to take Questions Nos. 43, 49 and 53 together.
In this year's budget all personal and adult rates of payment were increased by 2.5 per cent. These increases come into effect this week — that is six weeks earlier than in previous years. So the value of the increase is greater than it would have been if implemented at the end of July, as had been the policy of previous Governments. The 2.5 per cent increase is in line with current inflation levels. It is also in line with the official forecasts for inflation made by both the Department of Finance and the Central Bank. For families with children, the total increase in family income is greater. This is because of the substantial increase in child benefit. We increased this payment by £7 per child per month.
This year's budget improvements to social welfare payments cost £212.1 million in full-year terms. This compares to £157.1 million last year. Within the funds available, the Government gave particular priority to child benefit — accounting for £90.2 million of these costs. There were very good reasons for giving particular priority to child benefit. Families with children face particular risks of poverty, so giving greater increases to families with children is an effective way of targeting resources. Furthermore, the existing arrangements whereby child dependant allowances are paid with unemployment payments contributes to unemployment and poverty traps; increasing the amount paid through universal payments like child benefit eases this problem.
I am not satisfied with the adequacy of social welfare rates generally. In line with a commitment in the programme,A Government of Renewal, I am arranging a review to be undertaken by the Economic and Social Research Institute of the minimum adequate rates recommended by the Commission on Social Welfare.
John Ellis
Question:
45
Mr. Ellis
asked the
Minister for Social Welfare
if he will review the amount of capital allowable before means are assessed for old-age pension purposes.
[8269/95]
Séamus Hughes
Question:
59
Mr. Hughes
asked the
Minister for Social Welfare
the present income disregard for non-contributory old age pension; the year it was introduced; and the proposals, if any, he has to adjust the income disregard by the rate of inflation which has taken place in the intervening period.
[88212/95]
I propose to take Questions Nos. 45 and 59 together.
In determining entitlement to an old age non-contributory pension, the first £6 of weekly means are disregarded, so that a person with £6 weekly means qualifies for the same rate of pension as a person with no means. In the case of a married couple the disregard would be £12 a week. The £6 disregard was introduced in 1975.
A number of other disregards also apply as follows: £104 per annum of any earnings of a pensioner for each dependent child; the value of the applicant's home and, where a pensioner sells his or her principal residence and either buys or rents alternative accommodation, or moves into a private nursing home, an exemption of the income derived from the sale applies, up to a limit of £75,000.
As far as capital is concerned a person can have means up to £2,987.50, if single, or £5,975, if married, and still receive the full rate pension. A couple could have joint capital up to £66,295 and still qualify for the minimum rate of pension and participate in all the "free schemes".
The means assessment takes account of money and property, other than the family home, which is assessed on a notional basis, and of income, subject to certain exceptions, which a person or his or her spouse or partner may reasonably expect to receive in the following year.
From 1975 to date the increase in the rate of inflation is estimated at 360 per cent. In the same period the rate of old age — non-contributory — pension increased by 572 per cent resulting in a real increase in the rate of pension of over 46 per cent.
Successive Ministers for Social Welfare have concentrated on increasing the rate of non-contributory pension rather than further increasing the disregards which would primarily benefit only those who already had means. An increase in the level of disregard to £40, as recently suggested by Deputy Hughes, would cost an estimated £50 million per annum. I am not convinced that this would be the best use of such resources.
